PHR Human Resources Exam Prep

Answer - A - True.

Key Takeaway: Restricted stock is subject to special SEC regulations before it can ever be sold on the market. Typically, restricted stock is given as a reward to insiders after an acquisition or a merger. Doing so will prevent an adverse impact on the market price of the stock, as it will be required that stockholders actually hold onto the stock for a prescribed period of time before they may sell it publicly.