Which of the Following Statements Is FALSE

question 1

Multiple Choice

Which of the following statements is FALSE?

• A)Once the issue price (or offer price)is set,underwriters may invoke another mechanism to protect themselves against a loss-the over-allotment allocation.
• B)Before the offer price is set,the underwriters work closely with the company to come up with a price range that they believe provides a reasonable valuation for the firm.
• C)Before an IPO,the company prepares the final registration statement and final prospectus containing all the details of the IPO,including the number of shares offered and the offer price.
• D)An "allocation trip" is where senior management and the lead underwriters travel around the country (and sometimes around the world)promoting the company and explaining their rationale for the offer price to the underwriters' largest customers-mainly institutional investors such as mutual funds and pension funds.

---

Definitions:

Juice Glass

A glass designed specifically for serving juice; typically smaller than other beverage glasses.

Sarcasm

Employing irony to ridicule or express disdain.

Functional Fixedness

A cognitive bias that limits an individual to using an object only in the way it is traditionally used, hindering problem-solving.

Heating Vent

An opening designed to allow the passage of warm air from a heating system into a room or building.