Which of the Following Statements Is Most CORRECT

question 4

Multiple Choice

Which of the following statements is most CORRECT?

• A) Private placements occur most frequently with stocks, but bonds can also be sold in a private placement.
• B) Private placements are convenient for issuers, but the convenience is offset by higher flotation costs.
• C) The SEC requires that all private placements be handled by a registered investment banker.
• D) Private placements can generally bring in funds faster than is the case with public offerings.
• E) In a private placement, securities are sold to private (individual) investors rather than to institutions.

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Definitions:

Security

A financial asset, such as a stock or bond, that can be traded in the financial market.

Manufacturer

A manufacturer is a person or company that makes goods for sale, especially on a large scale, involving processes like designing, fabricating, and marketing.

Conditional Sale Agreement

A contract for the sale of goods where the purchase price is paid in installments and the ownership of the goods is transferred to the buyer only after all payments have been made.

Provincial Legislation

Laws enacted by the legislative assemblies of provinces in countries with a federal system of government.