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 agoRelated Solutions
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