A Corporation Acquires New Funds Only When Its Securities Are

question 139

Multiple Choice

A corporation acquires new funds only when its securities are sold in the

• A)secondary market by an investment bank.
• B)primary market by an investment bank.
• C)secondary market by a stock exchange broker.
• D)secondary market by a commercial bank.

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Definitions:

Bearer Instrument

A negotiable financial instrument that designates payment to whoever holds the instrument, not requiring ownership to be registered with the issuer.

Indorsed

The act of signing one's name on the back of a check or other negotiable instrument for the purpose of transferring rights or entitlements.

Ratification

The formal approval of an agreement, treaty, or act, making it officially valid.

Promissory Note

A written promise to pay a specified amount of money to a person or entity under agreed conditions.