Question

In: Finance

In a __________ underwriting arrangement, the underwriting bank does not commit to buying all the securities from the firm at a fixed price.

In a __________ underwriting arrangement, the underwriting bank does not commit to buying all the securities from the firm at a fixed price.



private placement



none of these options



best-efforts



firm-commitment

Solutions

Expert Solution

In firm-commitment underwriting, the underwriter is obliged to purchase all the securities which are offered for sale by the issuer.

In private placement, the stock is issued to pre selceted investors and not to public.

In best efforts underwriting, underwriter is not obligated to buy securities on it's own account.

3rd option, best efforts is the correct answer.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

The difference between the underwriters' buying price and the offering price of the securities to the...
The difference between the underwriters' buying price and the offering price of the securities to the public is called the _. a Spread b Underpricing c Signalling d New issue premium
A. Describe the differences in the underwriting process for an Investment Bank between a firm commitment...
A. Describe the differences in the underwriting process for an Investment Bank between a firm commitment securities offering and a best efforts offering. B. What are the risks assumed by the Investment Company and those assumed by the Client for each of these two types of offerings. (I want you to type the anwer)
A bank offers your firm a revolving credit arrangement for up to $78 million at an...
A bank offers your firm a revolving credit arrangement for up to $78 million at an interest rate of 1.95 percent per quarter. The bank also requires you to maintain a compensating balance of 6 percent against the unused portion of the credit line, to be deposited in a non-interest-bearing account. Assume you have a short-term investment account at the bank that pays 1.30 percent per quarter, and assume that the bank uses compound interest on its revolving credit loans....
What is the relationship between price and yields for fixed income securities? There is a government...
What is the relationship between price and yields for fixed income securities? There is a government bond with a par value of $1000, and %4 semi- annual coupon rate. The bond was issued 6 years ago when the market interest rates are 8%. (The yield to maturity is %8). The remaining maturity of this bond is 1,5 years. Make comment about the price of this bond. a- If somehow, the market interest rates remain unchanged (ytm unchanged) b- If the...
What is the relationship between price and yields for fixed income securities? There is a government...
What is the relationship between price and yields for fixed income securities? There is a government bond with a par value of $1000, and %4 semi- annual coupon rate. The bond was issued 6 years ago when the market interest rates are 8%. (The yield to maturity is %8). The remaining maturity of this bond is 1,5 years. Make comment about the price of this bond. a- If somehow, the market interest rates remain unchanged (ytm unchanged) b- If the...
What is the relationship between price and yields for fixed income securities? There is a government...
What is the relationship between price and yields for fixed income securities? There is a government bond with a par value of $1000, and %4 semi- annual coupon rate. The bond was issued 6 years ago when the market interest rates are 8%. (The yield to maturity is %8). The remaining maturity of this bond is 1,5 years. Make comment about the price of this bond. a- If somehow, the market interest rates remain unchanged (ytm unchanged) b- If the...
3) What is the relationship between price and yields for fixed income securities? There is a...
3) What is the relationship between price and yields for fixed income securities? There is a government bond with a par value of $1000, and %4 semi- annual coupon rate. The bond was issued 6 years ago when the market interest rates are 8%. (The yield to maturity is %8). The remaining maturity of this bond is 1,5 years. Make comment about the price of this bond. a- If somehow, the market interest rates remain unchanged (ytm unchanged) b- If...
What is the relationship between price and yields for fixed income securities? There is a government...
What is the relationship between price and yields for fixed income securities? There is a government bond with a par value of $1000, and %4 semi- annual coupon rate. The bond was issued 6 years ago when the market interest rates are 8%. (The yield to maturity is %8). The remaining maturity of this bond is 1,5 years. Make comment about the price of this bond. a- If somehow, the market interest rates remain unchanged (ytm unchanged) b- If the...
How does a sale of securities (open market operations) by the Bank of Canada affect the...
How does a sale of securities (open market operations) by the Bank of Canada affect the real GDP and price level? Use either three graphs or a flow chart to demonstrate this.
. In the simple fixed-price Keynesian model with no taxes and fixed imports, why does the...
. In the simple fixed-price Keynesian model with no taxes and fixed imports, why does the MPC have to be less than one? What happens if the MPC is equal to one?    What if the MPC is greater than one?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT