Question : Assertion: Initial Public Offering (IPO) is a method of raising short-term funds from the capital market.
Reason: IPO involves issuing new securities to the existing shareholders.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Assertion is true, but the reason is false.
Solution : The correct answer is (c) Assertion is true, but the reason is false.
The assertion is true. An Initial Public Offering (IPO) is a method of raising funds from the capital market.
The reason is false. IPO involves a company issuing its shares to the public for the first time, not issuing new securities to existing shareholders. It is about offering shares to the general public, not specifically to existing shareholders.
Question : Assertion: An IPO provides an opportunity for the public to invest in a company.
Reason: IPOs are only available to existing shareholders of the company.
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