CFA Practice Question

There are 233 practice questions for this study session.

CFA Practice Question

A company prohibits itself from offering shares at discounted prices to management, board members, and other insiders prior to a public offering of its securities. This practice is ______
A. preferred by investors because it demonstrates that the company aligns itself with the investors' interests.
B. not preferred by the capital markets regulatory body because it might encourage an opportunity for insider trading.
C. not preferred from a corporate governance point of view because it might encourage executives to compensate themselves from short-term share transactions.
Explanation: This practice is preferred because it is beneficial for the long-term interests of investors.

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