An Initial Public Offering (IPO)is Characterized by All of the Following

question 88

Multiple Choice

An initial public offering (IPO) is characterized by all of the following except

• A)the first time offering of stock by a corporation.
• B)can be sold later for a profit in the secondary market.
• C)can result in losing the investment.
• D)is available to individual investors before institutional investors.

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Definitions:

Interest Rate

The cost of borrowing money, expressed as a percentage of the amount borrowed.

Present Value

The current financial valuation of a sum of money due in the future or stream of income, based on a specific interest rate.

Future Value

The worth of an investment or cash flow at a specified future date, based on an assumed rate of growth over time.

Opportunity Cost

Opportunity cost refers to the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.