1.An ownership perspective can be important for an analyst determining the value of a share position. A block of shares that is very large in relation to the daily trading volume should receive a:

A)   discount for lack of liquidity.

B)   premium for block-size.

C)   a brokerage discount for volume.

D)   a premium for economy of scale.

2.An ownership perspective can be important for an analyst determining the value of a share position. A discount for lack of marketability would most likely be assigned to a position of shares in which of the following?

A)   A very large publicly traded firm.

B)   An estate or trust account.

C)   A bankrupt firm.

D)   A non-publicly traded firm.

3.An ownership perspective can be important for an analyst determining the value of a share position. A block of shares that is large enough to direct the future actions of the firm should receive a:

A)   premium for block-size.

B)   premium for control.

C)   a discount for management responsibilities.

D)   a discount for size.

1.An ownership perspective can be important for an analyst determining the value of a share position. A block of shares that is very large in relation to the daily trading volume should receive a:

A)   discount for lack of liquidity.

B)   premium for block-size.

C)   a brokerage discount for volume.

D)   a premium for economy of scale.

The correct answer was  A)

A share position that is very large in relation to the daily trading volume of the shares should be subject to a discount for lack of liquidity as it may take additional time to liquidate the position.

2.An ownership perspective can be important for an analyst determining the value of a share position. A discount for lack of marketability would most likely be assigned to a position of shares in which of the following?

A)   A very large publicly traded firm.

B)   An estate or trust account.

C)   A bankrupt firm.

D)   A non-publicly traded firm.

The correct answer was  D)

A share position in a non-publicly traded firm would be assigned a discount because it may require a lengthy search to locate willing and able buyers, and they may be only willing to purchase it at a discount.

3.An ownership perspective can be important for an analyst determining the value of a share position. A block of shares that is large enough to direct the future actions of the firm should receive a:

A)   premium for block-size.

B)   premium for control.

C)   a discount for management responsibilities.

D)   a discount for size.

The correct answer was  B)

A share position that is large enough to direct the future actions of a firm should receive a premium for control.