Which of the following is NOT one of the eight basic puzzles about financial structure?
A)Stocks are the most important source of finance for American businesses.
B)Issuing marketable securities is not the primary way businesses finance their operations.
C)Indirect finance,which involves the activities of financial intermediaries,is many times more important than direct finance,in which businesses raise funds directly from lenders in financial markets.
D)Banks are the most important source of external funds to finance businesses.

Question

Quizplus · Accepted Answer

The eight basic puzzles about financial structure include the following: (1) financial systems vary across countries, (2) the relationship between financial development and economic growth is uncertain, (3) stocks are not the most important source of external financing for businesses, (4) issuing marketable securities is an important way that businesses finance their operations, (5) financial intermediaries, such as banks and insurance companies, are important in all countries, (6) collateral is a prevalent feature of debt contracts even in developed countries, (7) debt financing is far more important than equity financing, and (8) foreign firms can access the same types of financing as domestic firms in a country. Therefore, the best choice is A because it is not one of the eight basic puzzles about financial structure.

Which of the Following Is NOT One of the Eight