1. Which of the following statements is most CORRECT? *

-Private placements occur most frequently with stocks, but bonds can also be sold in a private placement.

-Private placements are convenient for issuers, but the convenience is offset by higher flotation costs.

-The SEC requires that all private placements be handled by a registered investment banker.

-Private placements can generally bring in funds faster than is the case with public offerings.

-In a private placement, securities are sold to private (individual) investors rather than to institutions.

2. The selling of preferred stocks would _______the ______ risk and _____the cost of ______.

-Increase, credit, decrease, debt

-Decrease, credit, decrease, debt

-Increase, financial, increase, equity

-Increase, financial, increase, debt

-Decrease, financial, decrease, equity