Question 2 of 10
Investors who go through a capital formation process can expect:
A. a decrease in the diversity of their capital investments.
B. their capital to be used to fund high-risk investments.
C. banks to take control over a large portion of their capital.
O
D. the amount of capital they control to increase.
SUBMIT

Investors who go through a capital formation process can expect their capital to be used to fund high-risk investments. Retained earnings, loan capital, and equity capital are the three main sources of company finance.

What is the meaning capital formation?

Capital Formation is defined as the portion of a country's current output and imports that is not consumed or exported during the accounting period but instead added to its stock of capital goods.

There are various categories of total capital formation. Gross Fixed Capital Formation.

Thus, option B is correct.

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