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:

Returns To Scale

The rate at which output changes if the scale of all inputs is changed by the same proportion in the production process.

Input

Resources used in the production process to generate goods or services, including labor, raw materials, and capital.

Output

The total amount of goods or services produced by a company, sector, or economy within a specific time period.

Isoquants

Curves that represent all the combinations of two inputs that produce the same level of output, used in the analysis of production technology.