CFA Level I · CFA Level I Exam · Organizational Forms, Corporate Issuer Features, and Ownership
Relative to a public corporation, the shares of a private corporation are most likely to be:
Private corporation shares are most likely less liquid because no active public market exists for them. Without exchange listing there is no continuous market price and selling requires finding a buyer privately, whereas public shares trade freely on exchanges.
- Asubject to a continuous market-determined price
- Bless liquid because no active public market existsCorrect
- Cfreely sold by investors on a stock exchange
Explanation
Private shares are not listed, so there is no active secondary market, making them harder to sell and value. Continuous prices and exchange trading characterize public firms.
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