Which of the following is true of a market maker?

• Market makers rate the creditworthiness of the issuer.

• Market makers purchase a company's securities before an IPO and then resell them at a premium.

• Market makers assist with market liquidity by facilitating the exchange of securities.

• Market makers help companies to negotiate mergers and acquisitions.

Select one disadvantage of IRR as a capital budget method.

• It is not useful for comparing projects with different lifespans.

• It fails to account for the time value of money.

• It can only be used with projects that have positive cash flows.

• It can be difficult to interpret and understand.

Which of the following is an example of an operational risk for a company that manufactures automobiles?

• A state tax increase that makes buying and registering a car more expensive

• Rising interest rates that affect the terms of car loans, thereby decreasing demand

• Damage to completed cars held on a storage lot

• A national car rental agency backing out of a contract to buy a certain volume of new cars

Jerome needs funding to help start a business selling school supplies. He uses a website that connects him directly with a lender who charges a below-market interest rate. What type of financing resource is Jerome using?

• Trade credit

• Peer-to-peer lending

• Commercial lending

• Factoring