The Money Used by the Secondary Market to Purchase Loans

question 31

True/False

The money used by the secondary market to purchase loans comes from deposits in institutions.

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Definitions:

Common Stock

A type of security that signifies ownership within a corporation, known as corporate equity ownership.

Cumulative Feature

A characteristic of preferred stock that entitles shareholders to receive dividends that were omitted in the past before any dividends can be issued to common stockholders.

Preemptive Right

A shareholder's right to maintain their proportionate ownership by buying additional shares before they are offered to the public.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which does not necessarily match the market value.