The Following Is an Example of Risk Aversion

question 16

Multiple Choice

The following is an example of risk aversion

• A)those applying for a well-paid job tend to be unqualified
• B)more reckless drivers opt for cars with fewer safety devices
• C)the contractor with the lowest bid for a is the most qualified
• D)Initial Public Offerings (IPOs)seek investors when prospects look good

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Definitions:

Common Stock Par Value

A nominal value assigned to common stock shares, indicating the minimum price at which the shares can be issued.

Warrant Attached

An option issued by a company that gives the holder the right to purchase the company’s stock at a specific price before expiration.

Ex-rights

Denotes a security that is trading without the right to receive the most recently announced rights offering.

Additional Paid-in Capital

The amount of money investors have paid to a company above and beyond the par value of the shares they have purchased.