Which One of the Following Statements Concerning the Primary Market

question 40

Multiple Choice

Which one of the following statements concerning the primary market is correct?

• A) A transaction in the primary market is between two private stockholders.
• B) The first public sale of a company's stock in the primary market is called a seasoned new issue.
• C) The first public sale of a company's stock is called an IPO.
• D) A rights offering is a direct sale of stock to an institution that participates in the primary market.

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Definitions:

Nash Equilibrium

A concept in game theory where each player's chosen strategy maximizes their payoff given the strategies chosen by other players, and no player can benefit by changing their strategy unilaterally.

Marginal Cost

The cost of producing one additional unit of a product or service.

Profit-Maximizing

A strategy or process aimed at increasing a company's profits to the highest possible level.

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.