Which of the Following Statements Is FALSE

question 47

Multiple Choice

Which of the following statements is FALSE?

• A)ASIC requires that companies prepare a prospectus, a document that provides financial and other information about the company to investors, prior to an IPO. Company managers work closely with the underwriters to prepare the prospectus.
• B)In recent years, the US investment banking firm of W.R. Hambrecht and Company has attempted to change the IPO process by selling new issues directly to the public using an online auction IPO mechanism called Open IPO.
• C)The lead underwriter is the primary banking firm responsible for managing the deal. The lead underwriter provides most of the advice and arranges for a group of other underwriters, called the syndicate, to help market and sell the issue.
• D)Because of the potential conflict of interest, the underwriter will not make a market in the share after the issue.

---

Definitions:

Milk

A nutrient-rich liquid food produced by the mammary glands of mammals, commonly consumed by humans and used in a variety of dairy products.

Inelastic Demand

A situation where the demand for a good or service is relatively unaffected by changes in price.

Available Substitutes

Alternative products or services that consumers can opt for when faced with changes in price or availability of the original product.

Luxury Good

A good for which demand increases more than proportionally as income rises, and is often seen as a status symbol rather than a necessity.