Possible Disadvantages of Private Stock Exchanges to Investors Include

question 63

Multiple Choice

Possible disadvantages of private stock exchanges to investors include

• A)only large institutional investors may purchase shares in privately listed stocks.
• B)required disclosures may be less than those required when a firm goes public.
• C)trading volume is limited.
• D)required disclosures may be less than those required when a firm goes public AND trading volume is limited.

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Definitions:

External Benefit

A positive effect or advantage that results from a product or service's use, affecting individuals or entities who are not directly involved in the transaction.

Positive Externality

A beneficial effect experienced by a third party or the society as a whole, resulting from an economic transaction.

Market

The environment in which buyers and sellers interact to exchange goods, services, and information, setting prices through supply and demand.

Socially Optimal Quantity

Socially Optimal Quantity is the level of production or consumption of a good or service that results in the maximum possible economic efficiency and welfare, taking into account all social costs and benefits.