What is meant by a "hot issue" in the context of securities?

• A. An issue that is backed by multiple investors
• B. A new issue that is in high demand
• C. An investment that yields high returns
• D. A security that is guaranteed by the government

Answer: (B)

In the context of securities, a "hot issue" refers to a new issue that is in high demand. This term is commonly used to describe initial public offerings (IPOs) or newly issued securities that attract significant interest from investors, often leading to rapid sales and price increases. The high demand typically stems from various factors such as strong market sentiment, investor enthusiasm, or the perceived potential for growth of the issuing company.

When a security is deemed a "hot issue," it signifies that investors are eager to acquire the shares, which can create a surge in prices immediately after they become available. This interest can be driven by expectations of solid performance, positive news, or trends in the market.

Other options could relate to different aspects of securities but do not capture the specific meaning of "hot issue." For example, while an issue backed by multiple investors might indicate support, it does not encapsulate the notion of high demand specifically related to new offerings. Similarly, an investment yielding high returns is more about the performance of established securities rather than the market response to new issues. Lastly, government-backed securities represent a different category of safety and reliability rather than demand or popularity.