If the Demand for an Asset Increases, Its Price Will

question 117

Multiple Choice

If the demand for an asset increases, its price will

• A) increase and the rate of return for new investors of this asset will increase.
• B) decrease and the rate of return for new investors of this asset will increase.
• C) decrease and the rate of return for new investors of this asset will decrease.
• D) increase and the rate of return for new investors of this asset will decrease.

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Definitions:

Venture Capital Fund

A fund that invests in high-growth companies in exchange for equity, or ownership stakes, typically in early-stage companies.

Private Placement

The offering of securities to a relatively small number of select investors as a way of raising capital.

Flotation Costs

Expenses incurred by a company in issuing new stocks or bonds, including underwriting costs, legal fees, and registration fees.

Oversubscription Option

A clause in an offering agreement that allows the issuer to sell more shares than originally planned if the demand exceeds expectations.