A Rights Issue Is One in Which a Public Company

question 18

True/False

A rights issue is one in which a public company offers shares only to existing shareholders in order to raise additional cash.

---

Definitions:

Required Reserves

The minimum amount of funds that a bank or depository institution must hold in reserve against specified deposit liabilities.

Excess Reserves

are the funds that banks hold over and above the required minimum reserves mandated by the central bank.

Federal Reserve Banks

Part of the central banking system of the United States, responsible for implementing monetary policy, providing financial services, and supervising and regulating banks.

Depository Institutions

Financial institutions such as banks and credit unions that accept deposits from individuals and provide loans.