A bridge loan provided by a securities firm would most likely be made to
A) a corporation until the corporation raises funds in other ways.
B) a commercial bank in the federal funds market.
C) a mutual fund that needs to cover share redemptions.
D) an investor who has received a margin call and needs to add cash to his margin account.

Question

Quizplus · Accepted Answer

A bridge loan provided by a securities firm is often made to a corporation until the corporation raises funds in other ways, such as through a public offering or private placement of securities. This provides the corporation with temporary funding to bridge the gap between the need for capital and the arrival of permanent funding. It is not typically provided to a commercial bank, a mutual fund covering share redemptions, or an individual who has received a margin call.

A Bridge Loan Provided by a Securities Firm Would Most