In the simplified financial system depicted in Figure 1-1 of the text, in which direction do interest and dividends flow?
A) From market/investors to companies.
B) From market to investors.
C) Investors to market.
D) From companies to market/investors.

Question

Quizplus · Accepted Answer

In the simplified financial system depicted in Figure 1-1 of the text, interest and dividends flow from companies to the market and investors. Companies pay interest on debt securities issued to investors and distribute dividends to shareholders, which are received by investors in the market.

In the Simplified Financial System Depicted in Figure 1-1 of the Text