Corporations that buy financial instruments with money accepted from savers are classified as_________________?
Correct answer: C. Mutual funds
- A. Debit funds
- B. Credit funds
- C. Mutual funds
- D. Insurance funds
Explanation
Mutual funds pool money collected from savers and use it to purchase diversified financial instruments. Insurance funds also invest collected premiums, but they are not the standard term for this arrangement.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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