Which of the Following Is True Regarding Private Placements of Primary

question 27

Multiple Choice

Which of the following is true regarding private placements of primary security offerings?

• A) Extensive and costly registration statements are required by the SEC.
• B) For very large issues, they are better suited than public offerings.
• C) They trade in secondary markets.
• D) The shares are sold directly to a small group of institutional or wealthy investors.
• E) They have greater liquidity than public offerings.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not control the company outright.

Consolidation Method

An accounting technique used for combining the financial statements of subsidiary companies with the parent company.

Statement of Earnings

A financial document that provides an account of a company's revenue, expenses, and profit over a specific period, also known as an income statement.

FVTPL

Fair Value Through Profit or Loss, a classification under IFRS for financial instruments measured at their fair value with changes recognized in the profit or loss.