When a firm needs to raise money via a bond issue,one of the quickest ways is through a ________.This activity involves the purchase of a large block of securities by a large institutional investor such as a pension fund,an endowment fund,or an insurance company.
A)private placement.
B)public placement.
C)secondary offering.
D)none of the above.

Question

Quizplus · Accepted Answer

Private placement involves the sale of securities directly to a small group of institutional investors, rather than a public offering on a stock exchange. This method is quicker and less expensive than a public placement and is often used by firms to raise debt or equity quickly. A large institutional investor, such as a pension fund or insurance company, may be willing to purchase a large block of securities quickly, providing the firm with the necessary capital.

When a Firm Needs to Raise Money Via a Bond