Capital Markets

question 10

Multiple Choice

Capital markets:

• A) deal in long-term securities
• B) deal in short-term Treasury bills and long-term Treasury bonds to finance their deficits
• C) rarely are involved in real estate transactions
• D) consider mortgages only for short-term,interim financing

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Definitions:

Insolvency

The financial state in which an individual or company cannot meet their due debt obligations due to a lack of sufficient assets or funds.

Leverage

The use of borrowed capital or financial derivatives to increase the potential return of an investment.

IPO

An Initial Public Offering (IPO) is the process by which a private company offers shares to the public in a new stock issuance, allowing it to raise capital from public investors.

Public Investors

Individuals or entities that invest their money in publicly traded securities, such as stocks and bonds, available on the open market.