22. Which one of the following statements is TRUE? a. A tradable, standardized contract to buy/sell an asset in the future at a certain price is called a futures contract. b. One important role that stock options play in the U.S. is to provide a way of attracting and compensating talented workers in small, cash-starved, start-up companies. c. As a stock price drops, the value of related put options increases, thus acting like insurance on the value of the stock. d. All of the above are true. e. None of the above statements is true.

23.Which of the following statements is TRUE?

a. The costs of an IPO (as a percent of the amount raised) tend to increase with the size of the IPO.

b. The cost of obtaining equity financing is usually less than the cost of obtaining debt financing because equity

issues are less risky.

c. The cost of an IPO is usually lower that the cost of a SEO (seasoned equity offering or secondary offering).

d. An IPO occurs in the secondary market.

e. None of the above statements is true.