Which of the Following Is True Regarding Private Placements of Primary

question 27

Multiple Choice

Which of the following is true regarding private placements of primary security offerings?

• A) Extensive and costly registration statements are required by the SEC.
• B) For very large issues, they are better suited than public offerings.
• C) They trade in secondary markets.
• D) The shares are sold directly to a small group of institutional or wealthy investors.
• E) They have greater liquidity than public offerings.

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Definitions:

Accounts Payable

The amount of money owed by a company to its suppliers or creditors for goods and services purchased on credit.

Quick Ratio

A liquidity indicator that measures a company's ability to cover its short-term obligations with its most liquid assets, excluding inventories.

Accounts Receivable

Accounts Receivable refers to the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Short-term liabilities of a company for goods and services received from others but not yet paid for.