Which of the Following Is the Main Reason for Private

question 92

Multiple Choice

Which of the following is the main reason for private placements being less expensive than public offerings?

• A)In a private placement, the requirement for hiring an expensive investment bank to trade the stocks on behalf of the company is not mandatory.
• B)In private placements, issuers of stocks can quote a high price to the limited number of investors and get high returns.
• C)Private placements takes place within a firm itself, thereby avoiding expenditures on resources.
• D)Privately placed securities are exempt from the requirement to register with the Securities and Exchange Commission (SEC).

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Definitions:

Savings Accounts

Accounts with funds that usually cannot be withdrawn without advance notice; also known as time deposits.