Use the Following Statements to Answer This Question

question 38

Multiple Choice

Use the following statements to answer this question:
I.Risk of information asymmetry is high in an IPO because the company's public disclosure, as a public firm, is minimal.
II.An IPO prospectus eradicates the issue of information asymmetry completely.

• A)I and II are correct.
• B)I and II are incorrect.
• C)I is correct and II is incorrect.
• D)I is incorrect and II is correct.

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Definitions:

Written Statement

A documented declaration or assertion made by an individual, often sworn to be true, and used as evidence in legal proceedings.

Allegation

A claim or assertion that someone has done something illegal or wrong, typically made without proof.

Clear

Transparent or easy to understand; not clouded or obscured.

Concise

Concise refers to providing a lot of information clearly and in a few words; brief but comprehensive.