Exercise
Answer the following questions.
1. Disclosure is important for a DPP because:
A. DPPs invest in risky business enterprises
B. Having a general partner who led other profitable businesses can increase a DPP’s chance of success
C. An investor could lose her entire investment
D. All of the above
2. A managed offering means:
A. An underwriter forms a syndicate with other underwriters to sell the securities to the public.
B. The general partner hires a wholesaler to market the DPP to broker-dealers, who market to the public.
C. The DPP must disclose the risks involved in managing the investment.
D. The DPP should disclose the general partner’s management ability and experience.
Answer true or false.
3. _____ One of the major benefits of a private placement, in which sales are made to accredited investors directly, is that a DPP does not