Question

Match the following type of underwriting with its description below. Write the correct letter next to the corresponding question.

A) Best effort B) All or none C) Firm commitment D) Stand by

29. Investment Banker will do his/her best to sell all of the shares of the new issue but will buy any balance that was not sold ______

30. Investment Banker will do all he/she can to sell all of the shares of new issue _____

31. Investment Banker will buy all shares of the new issue directly from the issuer and go re-sell in the market ________

32. Investment Banker will attempt to sell all shares of the new issue but will recall the deal if the entire lot was not purchased by investors _________

Answer 1

  

_______________________________

_______________________________

Best effort = Investment Banker will do all he/she can to sell all of the shares of new issue

All or none = Investment Banker will attempt to sell all shares of the new issue but will recall the deal if the entire lot was not purchased by investor

Firm commitment =  Investment Banker will buy all shares of the new issue directly from the issuer and go re-sell in the market

Stand by = Investment Banker will do his/her best to sell all of the shares of the new issue but will buy any balance that was not sold

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