Which of the Following Is True of an Initial Public

question 1

Multiple Choice

Which of the following is true of an initial public offering (IPO) ?

• A) Buying an IPO stock is less risky than purchasing established companies in the secondary market.
• B) An IPO stock can be sold later in the primary market.
• C) An IPO's stock price may rise or fall rapidly on the first day.
• D) An IPO represents a company that was just created within the last month.

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Definitions:

Voidable Title

A legal state where a transaction or ownership of property can be invalidated by one party if fraud, misrepresentation, or other irregularities are discovered.

Buyer Receives

In a transaction, when the buyer takes possession or ownership of the purchased goods.

Encumber Goods

To place a burden or charge on goods, such as a lien or mortgage, that affects their use or transferability.

Title To Delivery

A legal concept indicating the transfer of ownership of goods from a seller to a buyer when specific conditions are met.