When a securities firm provides a bridge loan, it would most likely be
A)to a corporation until the corporation raises funds in other ways.
B)to a commercial bank in the federal funds market.
C)to a mutual fund that needs cover share redemptions.
D)to an investor who needs to cover his margin from buying stock.

Question

Quizplus · Accepted Answer

A bridge loan is a short-term loan provided by a securities firm to a corporation until the corporation raises funds through other means, such as a bond issue or a stock offering. The loan is usually meant to cover the financial gap between the present situation and the future financing arrangements.

When a Securities Firm Provides a Bridge Loan, It Would