Answer:
Allocated to future accounting periods based on the value of the benefit used during the period.
Explanation:
In a pre-payment. you already make the payment for a certain goods or services before you actually use them.
In most cases, the value of prepaid goods or services tend to be decreased as the time goes by , so you need to make adjustment based on the value of the benefit.
For example, Let's say that on June you purchase a prepaid insurance for 1 year, costing you $1,200. At the end of the year, you need to adjust the value and cut it in half since you've been using half of the benefit (6 months between june-December)
Your friend currently works as an accountant at a public accounting firm in the small town of Beaver Falls, Pennsylvania. He is offered a job in New York City for $60,000. Your friend calls you and tells you that he is excited about the new job offer, which gives him a raise from his current salary of $50,000. Based on your knowledge of economics, you think that Choose one: O A. your friend most likely should not be quite so excited because the extremely high cost of living in New York City means his real salary increase will be less than he imagined. B. your friend has every reason to be excited because he will be getting paid C. your friend has reason to be excited because in a bigger city he will häve more D. your friend has no reason to be excited because higher pay implies more job 120% of what he used to be paid. things to do and his higher salary will allow him to spend on those activities. responsibilities and more working hours. < 11/15> SUBMIT O Type here to search Esc
Answer:
A. your friend most likely should not be quite so excited because the extremely high cost of living in New York City means his real salary increase will be less than he imagined.
Explanation:
Large cities are associated with a high cost of living. House rent, food, and transport will cost more in major cities compared to smaller towns. In considering the job offer, the accountant should analyze the cost implications of living in the New York City in comparison to his salary increment.
A salary raise in economic terms will refer to an increase in pay after adjusting to any increase increase in prices. If the prices and subsequently cost of living is rising at a higher rate compared to salary increment, then an individual is actually experiencing reduced income. The accountant should consider the offer if the salary increments would cover the expected rise in the cost of living and leave him with some surplus.
Mr. A owned 75% of the voting stock and 85% of the nonvoting stock of Corporation Y. Mr. A transferred property with a fair market value of $90,000 and an adjusted basis of $70,000 to Y for an additional 5% of the voting stock and 5% of the nonvoting stock. What is the amount of gain to be recognized by Mr. A?
Answer:
$0
Explanation:
Since Mr. A already owns 75% of common stock (and 85% of nonvoting stock), the extra 5% will result in a total of 80% (and 90%), that means that he cannot recognize any loss or gain resulting from this transaction. This applies to all stockholders that own at least 80% of a company's stocks and transfer property in exchange for more stocks.
Leonore's Luxury Leather Footwear Corp. conducted a SWOT analysis and determined that at least 57% of consumers would demand high-end footwear and their sales should increase by 18% in the next year. This vision of what could happen is known as a _____.
Answer: Forecast.
Explanation:
The predicted increase in sales of of the Leonore's Luxury Leather footware is an example of a forecast of future events. A forecast is an estimation of an event or trend that would possibly occur in the future.
Paul Davis wants to deposit a lump sum of money today for a vacation that he plans to take to Asia after he graduates from Graduate School. Which formula should he use to determine the amount of money he will have available for his vacation?
Paul Davis should use the compound interest formula, A = P(1 + r/n)^(NT), to determine how much money he will have for his vacation. This formula allows for the calculation of the future value of an investment taking into account the initial deposit, interest rate, compounding frequency, and time.
Explanation:Paul Davis should use the compound interest formula to determine the amount of money he will have available for his vacation. The compound interest formula is A = P(1 + r/n)^(NT), where A represents the amount of money accumulated after n years, including interest, P is the principal amount (the initial amount of money), r is the annual interest rate (in decimal form), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.
For instance, if he deposits $10,000 with an annual interest rate of 5% compounded annually for 3 years, he can substitute these values into the formula like so: A = $10,000(1 + 0.05/1)^(1*3). Solving this will give him the amount of money he will have after 3 years.
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In the 1950s, the economist Bela Balassa compared 28 manufacturing industries in the United States and Britain. In every one of the 28 industries, Balassa found that the United States had an absolute advantageLOADING.... In these circumstances, would there have been any gain to the United States from importing any of these products from Britain? Explain. A. Since the United States had an absolute advantage in all 28 industries, it also had a comparative advantage in each industry and would not have gained anything from importing any of these products from Britain. B. Even with an absolute advantage, the United States would have benefited from importing those products for which Britain had the same opportunity cost. C. Since the United States had an absolute advantage in all 28 industries, it had more bargaining power and would have gained from importing all of these products from Britain. D. Even with an absolute advantage, the United States would have benefited from importing those products for which Britain had a comparative advantage. E. Even with an absolute advantage, the United States would have benefited from importing those products that Britain could have produced at lower total cost.
Answer:
D) Even with an absolute advantage, the United States would have benefited from importing those products for which Britain had a comparative advantage.
Explanation:
The basis for foreign trade are comparative advantages, not absolute advantages. You must remember that in order for trade to be effective and long lasting, both sides must benefit from it, not just one side.
Resources are limited, and that applies to everyone, to every corporation and to every country. You might have an absolute advantage at producing everything, but your production possibilities frontier sets you a limit on what products or combination of products you can produce. Sometimes it might be beneficial to trade and receive some products that you could produce more efficiently, but their opportunity costs might be too high. Probably you can get them at lower costs from foreign suppliers and use those resources for producing something else.
"Jane wins $100,000 in the lottery and immediately uses her winnings to open a donut shop. Her direct costs for the first year are $50,000. Alternatively, Jane could have placed her lottery winnings in a savings account earning 10 percent annual interest. Jane's total cost is"
Answer:
Jane's total cost is $60,000.
Explanation:
This is because of the phenomenon called Opportunity Cost.
Simply put, opportunity cost is the cost of the next best alternative use of resources when a choice is made at the detriment of another.
We can also define it by saying, Opportunity Cost is the forgone alternative.
So we know she spent $50,000 to start her business, but would have made 10% of $100,000 which is $10,000 which is the opportunity cost, she has incurred a total cost of $60,000.
Amble, Inc. exchanged a truck with a carrying amount of $12,000 and a fair value of $20,000 for a truck and $5,000 cash. The fair value of the truck received was $15,000. At what amount should Amble record the truck received in the exchange assuming the exchange?
Answer:
$15,000
Explanation:
The following journal entry shall be recorded in the accounts of Amble, Inc. in respect of exchange of truck.
Debit Credit
Fair value of truck purchased $15,000
Cash received on exchange $5,000
Carrying value of truck disposed $12,000
Gain on the truck disposed $8,000
In which case is velocity the highest?
a. the price level equals 4, the money supply equals 5,000, and output equals 20,000.
b. the price level equals 4, the money supply equals 20,000 and output equals 5,000.
c. the price level equals 2, the money supply equals 5,000, and output equals 20,000.
d. the price level equals 2, the money supply equals 20,000 and output equals 5,000
Answer:
a. the price level equals 4, the money supply equals 5,000, and output equals 20,000.
Explanation:
Velocity = (price × output) / money supply
A. (4 × 20,000) / 5000 = 16
B. (4 × 5000) / 20000 = 1
C. (2 × 20,000) / 5000 = 8
D. (2 × 5000) / 10000 = 0.5
The highest velocity is option A.
I hope my answer helps you
When preparing the statement of cash flows using the indirect method, a decrease in current liabilities is added to the net income to arrive at net cash provided by operating activities.
a) true
b) false
Answer:
b) false
Explanation:
Operating activities: It contains those transactions that affect the after-net income working capital. It would subtract the increase in current assets and a decline in current liabilities, while adding the reduction in current assets and a rise in current liabilities.
Therefore, the given statement is false.
To say that a decrease in current liabilities is added to net income to arrive at net cash by operating activities is FALSE
When there is a decrease in current liabilities:
It is assumed that cash was used to pay off the liabilities Cash must have reduced as it flowed to the liabilitiesBecause cash has reduced as a result of this, that cash should be deducted from net income and not added so as to reach the net cash provided by operating activities.
In conclusion, this statement is false.
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Which of the following will increase the future value of a lump sum investment? I. Decreasing the interest rate; II. Increasing the interest rate; III. Increasing the time period; IV. Decreasing the amount of the lump sum investment
Answer:
II. Increasing the interest rate;
III. Increasing the time period;
Explanation:
these two factors will increase the future value of a lump sum investment.
This can be explained as -
Suppose, a sum of $ 1,000 invested for 10 years @ 5 %, it will result in $ 1,628.89.
Now, if we increase the time period to 11 years, it will result in 1,710.34 And now if we increase the rate of interest to 6 %, it will result in $ 1,898.30
Final answer:
To increase the future value of a lump sum investment, you should increase the interest rate and the duration of the investment period. Decreasing the interest rate or the lump sum amount will lower the future value.
Explanation:
To increase the future value of a lump sum investment, certain factors need to be considered. Specifically:
Decreasing the interest rate typically lowers the future value because the compound interest earned over time will be less.Increasing the interest rate leads to a higher future value, since the compound interest earned on the lump sum will be greater.Increasing the time period of the investment also results in a higher future value. This is due to the benefit of compound interest accumulating over a longer period.Decreasing the amount of the lump sum investment naturally results in a lower future value because there is less principal amount to grow over time.Therefore, the correct options that will increase the future value of a lump sum investment are II. Increasing the interest rate, and III. Increasing the time period.
An example using the formula for compound interest clearly shows the impact of increasing the interest rate and time period. For instance, if you start with a $3,000 investment at a 7% annual rate for 40 years, the future value would be calculated as:
3,000[tex](1 + .07)^{40}[/tex] = $44,923
However, if the interest rate was increased or the time period extended, the future value would be even higher.
Fernando was thrilled to find out that his company had just decided to invest a great deal of money in the product he was managing. He knows that even with its recent high rate of growth and the fact that it dominates its market, he would need more money to establish it firmly. Using the BCG portfolio analysis, his product would be classified as a:
a. star
b. dog.
c. cash cow.
d. anchor.
e. question mark.
Answer:
a. star
Explanation:
The summary of the Boston Consulting Group matrix is as follows:
1. Dogs: This relates to products with low growth or market share.
2. Question marks or Problem Child: This relates to products in high growth markets with low market share.
3. Stars: This relates to products in high growth markets with high market share.
4. Cash cows: This relates to products in low growth markets with high market share
Based on the above categorization, Fernando being thrilled to find out that his company had just decided to invest a great deal of money in the product he was managing, and that he knows that even with its recent high rate of growth and the fact that it dominates its market, will imply that his product is a STAR
Which of the following types of employees possesses high commitment and low task performance but perform many of the voluntary "extra-role" activities that are needed to make the organization function smoothly?a. Stars b. Apathetics c. Dogs d. Citizens e. Lone wolves
Answer:
d. Citizens
Explanation:
Citizens have always been likely to react with loyalty to negative outcomes as they may not have all the integrity to motivate reform, but really want to be a participant of the company. You can locate citizens by targeting people who show the new employees around the building, collect birthday cakes for the celebration, purchase new supplies when necessary, and so on.
A situation in which an economic gain by one country results in an economic loss by another is called a
Answer:
A zero-sum game
Explanation:
A zero-sum game is a situation in which the gains of one country are the result of the losses of another country. For example, if country A invades country B, and takes possession of its natural resources, the economic gain of country A came as a result of the economic loss of country B.
Amanda, the sales manager at an e-commerce fashion site, decides the annual, monthly, and weekly targets of all the salespersons in the company. She sets these targets in such a way that the salespersons work toward achieving the organizational goals. In this scenario, which of the following management functions is best illustrated in Amanda's work?
A) Organizing.
B) Controlling.
C) Leading.
D) Planning.
Answer:
n this scenario, which of the following management functions is best illustrated in Amanda's work?
D) Planning.
Explanation:
Planning
Planning can be defined as the act of formulating strategies to achieve a goal. Managers often use planning to lay out procedure that are to be followed in order to attain a certain goal. It involves the decisions on how to achieve set goals beforehand. It is a way that involves the consideration of future events and making a decision in advance on how to go about the specific future events. Planning has the following features;
1. Serves as a major managerial functions. Before performing other managerial functions like controlling, organizing and leading, a plan has to be set out to determine the best way of performing them. Thus planning serves as the foundation on for other managerial functions.
2. Goal oriented
A plan always stipulates the organizations goals. The plan has to be in line with the achievement of the goals, thus it helps drive the organization in a direction where there is high possibility of the fulfillment of the goals.
The leader of a federal political party made the following campaign promise: "my administration will increase national defense without requiring sacrifices elsewhere in the economy." the promise can be kept if:________
a. the economy moves along the production possibilities in the direction of a greater quantity of defense.
b. the economy moves from a point inside the production possibilities curve toward a point on the production possibilities curve.
c. the production possibilities frontier shifts outward due to an improvement in technology.
d. either b) or c) occurs, but not as a result of a).
Answer:
D
Explanation:
Either b) or c) occurs, but not as a result of a).
the promise can be kept if the economy moves from a point inside the production possibilities curve toward a point on the production possibilities curve or if the production possibilities frontier shifts outward due to an improvement in technology and because the economy moves along the production possibilities in the direction of a greater quantity of defense.
When Kendra's manager asked the team to come up with new ideas for attracting people to their trade show booth, Kendra suggested installing a video game in the booth. Which part of the rational decision making process does Kendra's idea exemplify?
a. Implement the solution.
b. Identify the problem.
c. Evaluate alternatives.
d. Think up alternative solutions.
Think up alternative solutions can be exemplified by Kendra.
Explanation:A multiple step process of making some important decisions based oin the evaluation of many alternatives refers to the rational decision making process. This process involves choosing an alternative based on the logic, analysis and the objectivity.
There will be many alternatives for a problem and choosing a best one after a deep analysis of all the alternatives is the important thing that is considered by a rational decision making process. In the example given, many ideas are invited by the manager of Kendra and the idea of Kendra that must exemplified should be thinking about the alternative solutions as they can be evaluated and best one can be selected from it.
Suppose at $10 the quantity demanded is 100. When the price falls to $8, the quantity demanded increases to 130. The price elasticity of demand (using the midpoint formula) between $10 and $8 is approximately:
Answer:
-$1.17
Explanation:
The computation of the price elasticity of demand using mid point formula is presented below:
= (change in quantity demanded ÷ average of quantity demanded) ÷ (percentage change in price ÷ average of quantity demanded)
where,
Change in quantity demanded is
= Q2 - Q1
= 130 - 100
= 30
And, an average of quantity demanded is
= (130+ 100) ÷ 2
= 115
Change in price is
= P2 - P1
= $8 - $10
= -$2
And, the average of price is
= ($8+ $10) ÷ 2
= 9
So, after solving this, the price is -$1.17
Imagination Museum is holding nominations for its board of directors. It is the first time that over half of the positions are vacant 32 due to either retirements or term expirations. The new CEO wants to be sure that the board is representative of the community, as well as the patrons who attend most of the events. Which of the following considerations are important for a good board? Skipped Multiple Choice 1. racial balance 2. financial balance3. religious/cultural balance 4. educational attainment balance 5. gender balance
Gender balance considerations are important for a good board
Explanation:
Gender equality workforce is reached where people are able to obtain the same advantages, services and incentives irrespective of gender. It aims to achieve generally equality and results for males and females at job.
This helps to sustain the society by sharing ideas and views while acknowledging other ideas for the creation of the group. It also has a positive effect, a sign of neutrality. Eventually, group engagement should be applied in a safe and welcoming atmosphere with all sets of people.
A good board of directors should have a balance in terms of race, finance, religion/culture, education, and gender. This ensures diverse perspectives, equal representation and inclusivity, and helps in understanding and serving the community and patrons better.
Explanation:For the Imagination Museum to ensure that their board of directors is representative of their community and patrons, they should consider all the categories listed in the question. To achieve a racial balance, they should aim to have board members of diverse ethnic backgrounds that represent the demographics of the community. The financial balance implies having board members from different economic backgrounds which would ensure diverse perspectives and better understanding of the stakeholders. A religious/cultural balance is important to appreciate and manage cultural and religious diversity within the community. Educational attainment balance suggests having board members with different levels of education which can bring diverse knowledge and experiences. Lastly, gender balance is imperative in a board setup to ensure equal representation and inclusivity. Therefore, the CEO should aim for balance in all these areas.
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Relative to common ownership, private ownership generally leads to less conservation of resources. With private ownership, owners are held accountable for using their resources in a manner that harms the resources of others. Private ownership generally gives the owner little incentive to find ways to use the resource wisely. With private ownership, resource owners have little incentive to consider the preferences of others when deciding how to employ a resource.
Answer:
b. With private ownership, owners are held accountable for using their resources in a manner that harms the resources of others.
Explanation:
Which of the following is true regarding private ownership?
a.Relative to common ownership, private ownership generally leads to less conservation of resources.
b.With private ownership, owners are held accountable for using their resources in a manner that harms the resources of others.
c.Private ownership generally gives the owner little incentive to find ways to use the resource wisely.
d. With private ownership, resource owners have little incentive to consider the preferences of others when deciding how to employ a resource.
Private Ownership is when a company is being owned by people or an organization rather than Government
Let's consider the options
Private ownership does not lead to less conservation of resources. Infact resources are conserved through optimization in revenue and publicity. It does not give the owner little incentives. Resource onwers to do not have little incentives.
B. .With private ownership, owners are held accountable for using their resources in a manner that harms the resources of others is correct because the company is owned by group of people or organizations, therefore , there is a high level of accountability which is the opposite as regards government owned establishments.
A current asset is __________.a. the last asset purchased by a business. b. an asset which is currently being used to produce a product or service. c. usually found as a separate classification in the income statement. d. an asset that a company expects to convert to cash or use up within one year or the ope
Answer:
Right answer:
d. an asset that a company expects to convert to cash or use up within one year .
Explanation:
Current assests are expected to be sold , used, exhausted through the normal process of business operations. There´s an expectation that they can be converted to cash value over the next year period. They are short term assets for a company.
Baxter Company's merchandise inventory at the start of 2014 was $85,000. The company purchased inventory during 2014 in the amount of $323,000, and its inventory at the end of the year was $102,000. What was Baxter's Cost of Goods Sold for 2014?
Answer:
$306,000
Explanation:
The formula and the computation of the cost of good sold is shown below:
Cost of goods sold = Opening balance of merchandise inventory + Purchase made - ending balance of merchandise inventory
= $85,000 + $323,000 - $102,000
= $306,000
Basically we have applied the above formula to find out the cost of goods sold
What are the two characteristics of public goods? Explain the significance of each for public provision as opposed to private provision. What is the free-rider problem as it relates to public goods? Is U.S. border patrol a public good or a private good? Why? How about satellite TV?
Pubic goods are:
produced by the government for the welfare of the people with no costPublic goods are for the welfare of people, produced by the government as it's the government's responsibility to care for it's people.
Pubic goods are at no cost in order for it to be accessible to everyone, without a financial barrier or limit.
The free-rider problem is a market failure where pubic goods are being accessed and benefitted from but it's not being paid for by the benefiting group.
U.S border control is public goods as we, the general public, do not pay for it and it's aim is our protection, it is for our wellbeing.
Satellite TV is private goods as it's manufactured by a business or entrepreneur, and is sold for their profit.
Public goods are characterized by non-excludability and non-rivalry, leading to challenges in private provision and the free-rider problem. U.S. border patrol is a public good, while satellite TV is a private good.
Explanation:The two main characteristics of public goods are non-excludability and non-rivalry. Non-excludability means that once the good is provided, no one can be prevented from consuming it. This is significant because it makes it hard for private firms to charge for the good, leading us typically to public provision. Non-rivalry means that one person's consumption of the good does not limit another person's consumption. This means that there is no benefit to restricting access, again leading us to public provision.
The free-rider problem occurs because people can consume public goods without paying for them, benefiting without contributing to their production. This leads to under-provision of the good, as private firms have less incentive to produce it.
U.S. border patrol is a public good because it is both non-excludable and non-rivalrous. Everyone in the country benefits from it whether or not they paid for it. Satellite TV, on the other hand, is a private good because access to the broadcasts is restricted to those who pay for it.
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A television ad for Corona deodorant shows a college freshman being socially rejected for having body odor. He is teased and rejected by members of the college dance club. A fellow student gives him a Corona deodorant. After using the deodorant, the freshman is accepted in the dance club and becomes popular. In this ad, Corona is using a _____ appeal.
a. non-cognitive.
b. refutational.
c. humor.
d. comparative.
e. fear.
Answer:
In this ad, Corona is using a fear appeal.
Explanation:
Advertisement is the sharing of specific information for the sole purpose of promoting that product to specific audiences. The audience is the potential consumer that the advertisement is meant to convert to loyal customers. The advertisement campaigns are usually tailored to appeal to these audiences to increase the sales. An increase in sales usually reflects on increased profit margin levels. There are various appeal methods that can be used;
Fear appeal
The fear appeal theory tries to put the consequences of not buying the product to light with the intention of pushing the potential customer to buy the product to avoid the consequences. In our case, the Corona deodorant advertisement uses the fear appeal of social rejection to push consumers to buy their product in order to evade the consequence of being rejected. By using a college freshman who is socially rejected by members of the college dance club since they don't use the deodorant, they exploit the fear of social rejection in a college freshmen. Thus might push them to buy the product.
Identify the phase in the new product development process during which the item first acquires finite form. The concept generation phase The development phase The launch phase The concept or project evaluation phase
Answer: The correct answer is the TECHNICAL DEVELOPMENT PHASE
Explanation: The new product process refers to the next product in a company's product line. It is a product that adopts or replacea an existing product. This process goes through different stages.
The technical development phase is however the phase during which the item acquires finite form - a tangible good or a specific sequence of resources and activities that will perform an intangible service.
In which of the following phases of the new products process is the first full test-of-fit with manufacturing made? The launch phase The opportunity identification phase The concept generation phase The development phase
Answer:
The development phase
Explanation:
Every product goes through different phases till is manufactured and available for sale. Among these phases are identification phase, concept generation phase, development phase, launch phase, etc.
All of these phases have specific process that happen within them but for the purpose of this question, let's stick to the development phase.
The development phase of a product is the phase in which the product is designed and manufactured. The development starts with the manufacturing of a prototype and then it is tested for performance, etc The testing could be in the market or in a created environment, etc.
The results of this test is then put into consideration and its effect is taken into account. This helps to determine if the product should be redesigned or should have some parts of it removed or added, etc and ultimately decide whether to start full scale production of the product.
I hope this helps.
You live in a community with many teenagers, and you work during the summer bagging groceries for a low hourly wage. How might living in a community with fewer teenagers looking for grocery bagging jobs affect your hourly wage?
A. Your wages would probably be lower because demand for baggers would be higher.
B. Your wages would probably be higher because the supply of baggers would be higher.
C. Your wages would probably be lower because the supply of baggers would be higher.
D. Your wages would probably be higher because demand for baggers would be higher.
Answer:
D. Your wages would probably be higher because demand for baggers would be higher.
Explanation:
If I live in a community with fewer teenagers looking for grocery bagging jobs, the supply of labour would be lower. This would lead to an excess of demand over supply, wages would rise as a result.
I hope my answer helps you
Identification of problems is challenging. What portion of an MIS system would make managers aware of promotions that are cannibalizing other products or indicate which geographical regions are responding or not responding to promotions?
A) Marketing decision support system
B) Marketing research system
C) Marketing intelligence system
D) Internal reports system
Answer:
Internal reports system.
Explanation:
The following information pertains to Grey Co. on December 31, 17: Checkbook balance $12,000 Bank statement balance 16,000 Check drawn on Grey's account, payable to a vendor, dated and recorded 12/31/17 but not mailed until 1/10/18 1,800 On Grey's December 31, 17 balance sheet, what amount should be reported as cash?
Answer:
$13,800
Explanation:
Given that
Checkbook balance = $12,000
Bank statement balance = $16,000
Payable made to vendor = $1,800 but not mailed
So, the amount that is to be reported as a cash balance is shown below:
= Checkbook balance + Payable made to the vendor
= $12,000 + $1,800
= $13,800
As we have to find out the cash balance so we ignored the bank statement balance
Athena Company's salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:a. Debit Vacation Benefits Expense $16.500: credit Vacation Benefits Payable $16,500 b. Debit Vacation Benefits Expense $17,160, credit Vacation Benefits Payable $17,160c. Debit Vacation Benefits Expense $17.875: credit Vacation Benefits Payable $17,875 d. None of the above
Answer:
a. Debit Vacation Benefits Expense $16.500: credit Vacation Benefits Payable $16,500
Explanation:
858,000 wages per year / 52 weeks per year = 16,500 per week
The weekly wages for our employees are 16,500 dollars
For each of the two weeks of vacations we will do an adjusting entry by this amount.
Which of the following statementsis CORRECT?a.While the distinctions are becoming blurred, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other parties.b.The NYSE operates as an auction market, whereasNasdaq is an example of a dealer market.c.Money market mutual funds usually invest theirmoney in a well-diversified portfolio of liquid common stocks.d.Money markets are markets for long-term debtand common stocks.e.A liquid security is a security whose valueis derived from the price of some other "underlying" asset.
Answer:
b.The NYSE operates as an auction market, whereas Nasdaq is an example of a dealer market.
Explanation:
There are major types of market: auction market and dealer market.
Auction market is a type of market where the seller and buyers simultaneously trade the offer price and the bid price for security. The offer price represents the lowest price a seller want for security while the bid price represents the highest price a buyer intends to purchase. The matching of the two prices will make transaction work.
NYSE represents avenue for this type of security trading. It provides platform for buyer and seller to simultaneously trade once the bid price matches the offer price.
On the hand, dealer market is platform whereby many seller or buyers can relay the price at they want to sell or buy a security and any intending seller or buyer can come to the market sell or buy at that price. In a dealer market, there are multiple dealers involves in a trading a security and the market maker provides transparency and liquidity to ensure a smooth running of the market. Nasdaq is a potent example of a dealer market.
So option B is correct.
Other options are contradictory.