Question

In: Finance

Which one of the following best fits the description of private placement?

Which one of the following best fits the description of private placement? 

a) 3- year commercial bank loan

b) 3-year loan to a firm by its original founder

c) 10-year loan from an insurance company

d) 20-year bonds sold in the public markets

e) 2-year direct business loan

Solutions

Expert Solution

Option - C

Explanation: private placements refers to bonds that are issued in a private sale rather than through public markets. The investors in a privately placed bonds are institutional investors such as insurance companies, endowments, pension funds .

Hence option c satisfies the definition & which is more safer for the private placements


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