The Basic Laws in Supply and Demand Suggest That in General,the

question 63

Multiple Choice

The basic laws in supply and demand suggest that in general,the larger the pool of capital providers 

• A) the lower the cost of capital. 
• B) the higher the rate of return. 
• C) the more likely a firm will default on loan obligations. 
• D) the higher the ROI for investors.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or other security, as stated by the issuer.

Premium

An amount paid periodically to the insurer by the insured for covering their risk or the amount by which a bond or stock sells above its face value.

Issue Price

The price at which new or existing securities are offered for sale to the public.

Premium on Bonds Payable

The amount by which a bond's selling price exceeds its principal (face value), reflecting higher-than-market interest rates or low risk.