Which One of the Following Statements Concerning Debt Issues Is

question 73

Multiple Choice

Which one of the following statements concerning debt issues is correct?

• A)A prospectus is required for public issues of equity but not for debt.
• B)The only difference between a term loan and a private placement is the size of the issue.
• C)Direct long-term loans must be registered with the SEC.
• D)Firms often pay higher interest rates on term loans than on public issues of debt.
• E)Public debt tends to have more restrictive covenants than private debt.

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Definitions:

Demand Frequency

The rate at which goods or services are requested or required by customers.

Expected Demand

The anticipated quantity of a product or service that consumers will purchase in a future period under given conditions.

Monte Carlo Simulation

A computational algorithm that uses repeated random sampling to obtain numerical results, often used to assess risk and uncertainty in business and engineering models.

Cumulative Probability

The probability that a random variable takes on a value less than or equal to a specific value, used to understand the likelihood of different outcomes.