During a Period of Economic Expansion,when Expected Profitability Is High

question 113

Multiple Choice

During a period of economic expansion,when expected profitability is high

• A) the demand curve for bonds shifts to the left.
• B) the supply curve of bonds shifts to the right.
• C) the equilibrium interest rate falls.
• D) the equilibrium price of bonds rises.

---

Definitions:

IPO Underpricing

The phenomenon where the initial offering price of a stock is set lower than the market price on its first day of trading.

Direct Private Long-term Debt Financing

A type of financing where companies borrow money directly from private investors, bypassing traditional bank loans and public markets.

Public Issues

The process by which a private company goes public by offering its shares to the public for the first time.

Registration Costs

Expenses associated with the process of registering a security with regulatory authorities (such as the SEC) before it can be offered for sale to the public, including legal, accounting, and printing fees.