Question

(I) In the United States, nonbank loans are the most important source of external funds for nonfinancial businesses.
(II) In Germany and Japan, issuing stocks and bonds is the most important source of external for nonfinancial businesses.
A) (I) is true, (II) false.
B) (I) is false, (II) true.
C) Both are true.
D) Both are false.

Answer 1

Answer:

A) (I) is true, (II) false.

Explanation:

Nonbank loans are loans handed out by nonbank financial institutions that do not take money deposits from clients (e.g. checking and savings accounts) like regular commercial banks or credit unions do. An example of nonbank loans are payday loans. Nonbank financial institutions offer a large variety of services besides loans, e.g. private education funding, retirement planning, trading in money markets, underwriting stocks and shares.