Question

Which of the following terms is associated with secondary (as opposed to primary) equity markets? A....

Which of the following terms is associated with secondary (as opposed to primary) equity markets? A. shelf registration B. seasoned equity offering C. bid-ask spread D. initial public offering E. underwriter's spread

Homework Answers

Answer #1

Option A:Shelf Registration is a prospectus of future multiple new offerings in the primary market. INCORRECT OPTION

Option B:Seasoned equity offering is issue of new additional shares by corporation in primary market. INCORRECT OPTION

Option C:Bid-ask spread is related to trading which takes place in the secondary market. Bid is the highest price a buyer is willing to pay and ask is the lowest price a seller is willing to accept. The difference is the spread. CORRECT OPTION

Option D:Initial Public Offering is related to Primary Market as it is a fresh issue of shares to public. INCORRECT OPTION

Option E: Underwriter's spread is a term associated with the Investment banks' return after the IPO process which is related to primary equity market. INCORRECT OPTION

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