Question #44 - Reading 42.3 Standards of Professional Conduct Guidance for Standards III

Reading: Reading 42.3 Standards of Professional Conduct Guidance for Standards III

PDF File: Reading 42.3 Standards of Professional Conduct Guidance for Standards III.pdf

Page: 18

Status: Correct

Correct Answer: C

Question

Pro rata allocation on the basis of an advance indication of interest means each account for which the shares are suitable:

Answer Choices:

A. and which has expressed an advance indication of interest, shall receive w*m shares, where w is the account's proportional value of all such accounts and there are m shares available

B. shall receive m/n shares, where there are m shares available and n such accounts

C. and which has expressed an advance indication of interest, shall receive m/n fraction of their indication, where there are m shares available and indications of interest for n shares

Explanation

Pro rata allocation on the basis of an advance indication of interest means that all accounts that have expressed an interest in the issue shall receive m/n fraction of their indication of interest, where there are m shares available and indications of interest for n shares. (Module 42.5, LOS 42: III(B))

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