Which of the Following Statements Regarding Firm Commitment IPOs Is

question 41

Multiple Choice

Which of the following statements regarding firm commitment IPOs is FALSE?

• A)If the entire issue does not sell out,the remaining shares must be sold at a lower price and the underwriter must take the loss.
• B)The underwriter purchases the entire issue (at the offer price)and then resells it at a slightly higher price to interested investors.
• C)It is the most common underwriting arrangement.
• D)The underwriter guarantees that it will sell all of the stock at the offer price.

---

Definitions:

Protocol

A set of rules or procedures for transmitting data between electronic devices, such as computers or phones, to ensure accurate and secure communication.

Information and Communications

The study or use of systems (especially computers and telecommunications) for storing, retrieving, and sending information.

Rules

Directives or instructions that guide behavior or operations in systems, organizations, or software.

Fiber-Optic

Refers to the technology and medium associated with the transmission of information as light pulses along a glass or plastic fiber.