Which One of the Following Statements Concerning Debt Is Correct

question 47

Multiple Choice

Which one of the following statements concerning debt is correct?

• A) The vast majority of bonds issued are sold in the public markets.
• B) Bond issues avoid the registration required on equity issues.
• C) Interest rates on private placements tend to be higher than those on similar public issues.
• D) A prospectus is required for a new equity issue, but not for a bond issue.
• E) Private placement debt tends to be less flexible than public debt.

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Definitions:

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after being repeatedly exposed to it.

Sensorimotor Stage

The first of Jean Piaget's stages of cognitive development, where infants from birth to about 2 years old learn through interacting with their environment using their senses and motor actions.

Active Experimentation

A learning approach where individuals learn by doing, engaging in activities to test hypotheses and reflect on outcomes to gain new knowledge.

Mental Combinations

The process where children start to mentally link objects and ideas, indicative of early cognitive development.