Which One of the Following Statements Concerning the Issuance of Long-Term

question 54

Multiple Choice

Which one of the following statements concerning the issuance of long-term debt is correct?

• A)A direct placement of debt generally has more restrictive covenants than a public issue.
• B)Private placements generally have shorter maturities than term loans.
• C)All U.S.debt issues, private and public, must be registered with the SEC.
• D)It is easier to renegotiate a public issue than it is a private issue of debt.
• E)Rarely is debt issued privately in the U.S.

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Definitions:

Inelastic

A characteristic of a good or service whose demand or supply is relatively unresponsive to changes in price.

Elastic

A characteristic of a product or service that indicates its demand or supply significantly changes with a change in price.

Unit Elasticity

A situation where a change in the price of a product leads to a proportional change in the quantity demanded or supplied.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specified period of time.