Which of the Following Statements Is CORRECT

question 3

Multiple Choice

Which of the following statements is CORRECT?

• A) The term "IPO" stands for Introductory Price Offered, and it is the price at which shares of a new company are offered to the public.
• B) IPO prices are generally established by the market, and buyers of the new stock must pay the price that prevails at the close of trading on the day the stock is offered to the public.
• C) In a "Dutch auction," investors who want to buy shares in an IPO submit bids indicating how many shares they want to buy and the price they are willing to pay. The company determines how many shares it wants to sell. The highest price that enables the company to sell the desired number of shares is the price that all buyers must pay.
• D) It is possible that the price set in an IPO is so high that investors will refuse to buy the number of shares that the company wants to sell. In that case, the company is said to have "left money on the table."
• E) It is possible that the price set in an IPO is so low that investors will want to buy more shares than the company wants to sell. In that case, the company will have to issue more shares than it wants to sell.

Describe the consequences of changes in law on existing contracts.

Recognize the characteristics of severable contracts and their interpretation under contract law.

Understand exculpatory clauses and their limitations within contractual agreements.

Explain the concept of substantive and procedural unconscionability and its relevance to contract fairness.

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Definitions:

Interest Rate

The payment, specified as a percentage of the principal, necessitated by a lender from a borrower for employing assets.

Required By Law

Mandated actions or procedures as stipulated by legislation or legal statutes.

Compounded Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods, applied once per year.

Compounded Semi-Annually

The process of calculating interest on a principal sum and its accumulated interest at two intervals within the year.