What happens in the primary market?
A) newly issued claims are sold by the borrowing firm to the initial buyer
B) already issued claims are sold from one investor to another
C) primary inputs like electricity are sold
D) a corporate financial manager will resell previously issued shares of stock
A
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In the above figure, if the budget line shifts from RT to RS, the income effect is illustrated by the move from
A) a to b. B) a to c. C) b to c. D) T to S.
Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. Larry's opportunity cost of attending Elite U is:
A. $50,000 B. $15,000 C. $20,000 D. $70,000