The ________ Rate of Interest Is Determined by Interaction of the Supply

question 26

Multiple Choice

The ________ rate of interest is determined by interaction of the supply and demand functions. As a cost of borrowing and a reward for lending, the rate must reach the point where total supply of savings ________ total demand for borrowing and investment.

• A) equilibrium; is greater
• B) minimum; equals
• C) equilibrium; equals
• D) minimum; is greater

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Definitions:

Shelf Prospectus

Frequently, companies will file a prospectus and then update it with a short-form prospectus just before an offering. This procedure is termed a shelf prospectus because companies put new securities “on the shelf” and then later sell them when the market is right.

Prospectus Supplement

A document that provides additional information to a prospectus, detailing specifics about an investment offering for potential investors.

Tender Offer

The offer of one firm to buy the stock of another by going directly to the shareholders, frequently over the opposition of the target company’s management.

Private Placement

Private Placement is a method of raising capital through the sale of securities to a relatively small number of select investors rather than through a public offering.