American_Bankers_Association
CTFA · Question #235
If an investment banker has agreed to sell a new issue of securities on a best-efforts basis, the issue:
The correct answer is C. Results in no assumption of underwriting risk by the investment banker. See the full explanation below for the reasoning.
Investment Management
Question
If an investment banker has agreed to sell a new issue of securities on a best-efforts basis, the issue:
Options
- AMost likely involves an unusually large stock offering
- BMost likely involves bonds instead of common stock
- CResults in no assumption of underwriting risk by the investment banker
- DMost likely involves a well-established, large company
How the community answered
(32 responses)- A3% (1)
- B13% (4)
- C81% (26)
- D3% (1)
Topics
#best efforts offering#underwriting risk#investment banking#securities issuance
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