1) Which of the following terms refers to the process of converting a not-for-profit stock exchange owned by its members to a for-profit organization with publicly-traded stocks that are owned by outside shareholders?

a. Privatization

b. Flotation

c. Consolidation

d. Diversification

e. Demutualization

2) When issuing new securities, which of the following decisions does the firm make by itself?

a. Deciding whether to go for a competitive bid or a negotiated deal with an investment banker

b. Reevaluating the decisions about the size of the issue and the type of securities to be issued

c. Deciding the offering price d. Determining the flotation costs

e. Deciding whether to go for a best-efforts or an underwritten issue