From an investor ' s standpoint, the principal disadvantage of a private placement of securities,...

The correct answer is A, the transfer of the securities is restricted. Private placements are exempt from registration under the Securities Act of 1933, typically conducted under Regulation D, and are sold to accredited or sophisticated investors. Because these securities are not registered with the SEC, they are classified as restricted securities, meaning they cannot be freely resold in the public market.

Investors who purchase private placement securities face liquidity risk, as they must generally hold the securities for a specified period (often under Rule 144) before they can be sold, and even then, resale may be limited. This lack of a ready secondary market is the primary disadvantage compared to publicly traded securities, which can be bought and sold easily.

Choice B is incorrect because tax treatment is not inherently worse for private placements. Choice C is incorrect because private placements typically involve lower issuance costs for issuers due to fewer regulatory requirements. Choice D is actually an advantage to investors, as private placements are often offered at a discount to compensate for reduced liquidity.

Thus, the key drawback for investors is the restriction on resale, making choice A correct.