A Firm That Chooses to Raise Funds Through a Distribution

question 18

Multiple Choice

A firm that chooses to raise funds through a distribution of securities is known as

• A)an underwriter.
• B)an issuer.
• C)an SRO.
• D)an open-market trader.
• E)a qualified offeror.

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Definitions:

Market Neutral

An investment strategy that seeks to avoid some forms of market risk by taking offsetting positions in different securities, aiming for a net market exposure of zero.

Government Regulation

The act of controlling business behavior through a set of rules or laws set forth by the government to achieve outcomes that might not be achieved through free markets.

Incentive Fee

An incentive fee is a fee charged by a fund manager based on the fund's performance, encouraging the manager to achieve superior returns.

Benchmark

A standard or point of reference against which the performance of a security, mutual fund, or investment manager can be measured.