Which of the Following Statements Is FALSE

question 9

Multiple Choice

Which of the following statements is FALSE?

• A) The general partners work for and run the venture capital firm; they are called venture capitalists.
• B) An important consideration for investors in private companies is their exit strategy-how they will eventually realize the return from their investment.
• C) When a company founder decides to sell equity to outside investors for the first time, it is common practice for private companies to issue common stock rather than preferred stock to raise capital.
• D) Institutional investors such as pension funds, insurance companies, endowments, and foundations manage large quantities of money.

Comprehend the role and procedures of issuing common and preferred stocks.

Understand the importance and function of a transfer agent within a company.

Grasp the concept and significance of authorized, issued, and outstanding shares.

Differentiate between private and public corporations and their characteristics.

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Definitions:

Defective Parts

Components or elements that are flawed or malfunctioning and do not operate as intended.

Overcompensating

Exaggerating one's efforts in one area to make up for a real or perceived deficiency in another area.

Inferiority Complex

A psychological condition that arises from persistent feelings of inadequacy, often leading to overcompensation or avoidance behaviors, differing in intensity from general inferiority feelings.

Oedipus Complex

A concept in psychoanalytic theory involving a child's unconscious desire for the opposite-sex parent and jealousy toward the same-sex parent.