Market Stabilization

question 13

Multiple Choice

Market stabilization

• A) is the action by the managing investment banker to keep the price of newly issued securities from falling below the issue price to the public.
• B) usually lasts 2-3 days but can last up to 30 days if a security is difficult to distribute.
• C) cannot always keep prices of securities from falling-a case in point was the IBM issue, sold in October, l979.
• D) all of these.

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Definitions:

Iron Core

A component made of iron within an electromagnetic device, such as a transformer or inductor, used to enhance magnetic flux.

Mutual Induction

The phenomenon where a change in magnetic flux in one coil induces a voltage in an adjacent coil, used in transformers and inductive components.

Inductors

Passive electrical components designed to resist changes in current, storing energy in a magnetic field when current flows through them.

Current Flow

The movement of electric charge carriers, such as electrons, through a conductor or semiconductor.