When linking how is the coordinate frame changed

When I link prims how is the coordinate frame transformed? Is it placed at the centroid of the composite object or what?

Speaking of coordinate frames (something near and dear to my heart) can I reposition the relative coordinate frame. There are modeling situations where this would be a real help.

Cheers,
Doug

Alternatively, can I position a coordinate frame in space and have a prim use it?

It uses the orientation and position of the root link prim.