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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

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

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