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21.Generally, initial public offerings (IPOs) are: A. overpriced. B. correctly priced. C. underpriced. D. there no gener

Question : 21.Generally, initial public offerings (IPOs) are: A. overpriced. B. correctly priced. C. underpriced. D. there no gener : 1409490

 

21.Generally, initial public offerings (IPOs) are: 
 
 

A. overpriced.

B. correctly priced.

C. underpriced.

D. there is no general trend.

22.The average initial returns from investing in IPOs is the highest in: 
 
 

A. Denmark.

B. China.

C. Italy.

D. Mexico.

23.The possibility that the winner (highest bidder) in an auction process may have bid a price that is very high (far above the value) is called: 
 
 

A. winner's curse.

B. seniority.

C. English auction.

D. uniform-price auction.

24.In a uniform-price auction: 
 
 

A. all winning bidders pay the price that they bid.

B. all winning bidders pay a price that is the highest bid.

C. all winning bidders pay a price that is the lowest winning bid.

D. all winning bidders receive their full allocation.

25.Suppose that a government wishes to auction 5 million bonds (quantity), and three potential buyers submit the following bids:

  

In a discriminatory auction: 
 
 

A. Buyer A pays $1,015 and Buyer B pays $1,000.

B. Buyer A pays $1,000 and Buyer B pays $1,000.

C. Buyer A pays $990 and Buyer B pays $990.

D. Buyer A pays $1,000 and Buyer C Pays $990.

26.Suppose a government wishes to auction 5 million bonds, and three would-be buyers submit the following bids:

  

In a uniform-price auction: 
 
 

A. Buyer A pays $1,015 and Buyer B pays $1,000.

B. Buyer A pays $1,000 and Buyer B pays $1,000.

C. Buyer A pays $990 and Buyer B pays $990.

D. Buyer A pays $1,000 and Buyer C Pays $990.

27.The winner's curse is reduced in a(an): 
 
 

A. discriminatory auction.

B. uniform-price auction.

C. English auction.

D. winner-take-all auction.

28.An equity issue sold to the firm's existing stockholders is called a: 
 
 

A. rights offer.

B. general cash offer.

C. private placement.

D. discriminatory-price auction.

29.A general cash offer involves the following processes:

I) register the issue with the SEC;
II) sell the securities through an underwriter or a syndicate of underwriters;
III) have underwriter build up a book of likely demand for the securities;
IV) price of the issue is fixed;
V) sell the securities to the public 
 
 

A. I, II, and III only

B. I, II, and IV only

C. I, II, III, IV, and V

D. II, III, IV, and V only

30.Which of the following statements best describes shelf registration? 
 
 

A. The issuance of securities to qualified institutional investors.

B. The enforcement of blue-sky laws.

C. The provision that allows large companies to file a single registration statement covering financing plans up to three years into the future.

D. Registration of the sale of securities in the primary market.

 

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