Why Are Privately Placed Bonds More Difficult to Sell Than

question 3

Multiple Choice

Why are privately placed bonds more difficult to sell than publicly issued bonds?

• A)they are usually commercial bank loans
• B)the presence of customized covenants
• C)funds come from private investors
• D)underwriting is required

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Definitions:

Law Of Demand

A fundamental principle stating that, all else being equal, as the price of a product decreases, the quantity demanded increases, and vice versa.

Price Falls

A decrease in the cost of a good or service in the market.

Quantity Demanded

The total amount of a good that consumers are willing to purchase at a given price level in a market.

Demand Curve

A graphical representation depicting the relationship between the price of a good and the quantity demanded by consumers, usually showing an inverse correlation.