Which of the following is true regarding private placements of primary security offerings?
A)Extensive and costly registration statements are required by the SEC.
B)For very large issues, they are better suited than public offerings.
C)They trade in secondary markets.
D)The shares are sold directly to a small group of institutional or wealthy investors.

Question

Quizplus · Accepted Answer

Private placements involve the sale of securities directly to a small group of institutional or wealthy investors, without the need for extensive registration statements or SEC approval. These offerings are typically used for smaller issuances where the cost of a public offering is not justified. Private placements do not trade in secondary markets as they are not registered with the SEC.

Which of the Following Is True Regarding Private Placements of Primary