Which of the Following Is True About the Process of Setting

question 6

Multiple Choice

Which of the following is true about the process of setting the offering price of a security issue?

• A)The offering price of an initial public offering (IPO) of the stock of a privately held company is determined by a financial intermediary.
• B)An investment banker has an easier job of selling the issue if it carries a relatively high price.
• C)An investment bank finds it easier to set the offering price of an initial public offering as compared to that of a seasoned offering.
• D)An investment bank finds it easier to set the offering price of a seasoned offering of a private company than a seasoned offering of a public company.
• E)If the company is already publicly owned, the offering price will be based on the existing market price of the stock or the yield on the firm's existing bonds.

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Definitions:

Absolute Threshold

The minimum stimulus intensity required for detection by a sense organ, signifying the point at which a stimulus becomes perceptible to the senses.

Noticeable Threshold

A threshold is the level at which a stimulus becomes sufficiently strong to produce a discernible effect or reaction.

Range Threshold

The minimum and maximum values within which a particular sensory stimulus, action, or phenomenon is perceptible or has an effect.

Receptors

Protein molecules on the surfaces of dendrites and cell bodies that have distinctive shapes and will interact only with specific neurotransmitters.