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.
E) They have greater liquidity than public offerings.

Question

Quizplus · Accepted Answer

Private placements of primary security offerings involve selling shares directly to a small, select group of institutional or wealthy investors, bypassing the need for extensive and costly registration with the SEC, unlike public offerings. This method is typically less liquid and not suited for very large issues compared to public offerings, and the securities do not trade in secondary markets as public offerings do.

Which of the Following Is True Regarding Private Placements of Primary