Question

Assertion (A): Offer to employees means sale of its securities by a company to a limited number of sophisticated investors.

Reason (R): Offer to employees enables employees to become shareholders and share the profits of the company.

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

Answer 1

Assertion (A) is false, but Reason (R) is true.

Explanation:

A private placement is when a business sells its securities directly to a select group of high-level investors.