A situation where a new security issue is sold to one buyer is called
A) private placement.
B) rights offering.
C) best-efforts.
D) red herring.

Question

Quizplus · Accepted Answer

Private placement is the sale of securities to a selected group of investors, usually institutional investors or high net worth individuals. It is not offered to the general public and is exempt from registration with the Securities and Exchange Commission (SEC) due to the limited number of buyers involved in the sale. Therefore, a new security issue sold to only one buyer would be considered a private placement. Choices B, C, and D are not applicable to this situation.

A Situation Where a New Security Issue Is Sold to One