The first part of each of the following is true. The second part, in italics, ma

Question

The first part of each of the following is true. The second part, in italics, may not be. First say whether the part of the statement in italics is true or false and then, if false, briefly explain why, focusing on the most important reason if there is more than one. The analyst connected to the underwriter that handles a company's IPO practically always recommends it as a buy. The fact that analysts virtually never issue sell ratings on their bank's IPOs proves that the analysts ratings (at least for IPOs) do not accurately reflect those analysts ' true opinions of the stocks.______Many of the terms in VC contracts, such as liquidation preferences, are focused on avoiding bad entrepreneurs rather than on avoiding bad VCs. This is not because all VCs are automatically honest, but because the performance of the VC is relatively easy to verify (was the money tuned over?), while the role of the insiders running the company is more complicated, with more opportunities for misconduct,___________

Explanation / Answer

ANSWER A: TRUE

ANSWER B: FALSE, because VC is a way to finance companies that are being born, or companies that have not record that allows trust their results, or be sure to be received returns for the money being BORROWED

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