If the Underwriter Wishes to Have the Option to Make

question 251

Multiple Choice

If the underwriter wishes to have the option to make additional profits if an IPO is oversubscribed, they may ask that the underwriting contract contain a _________.

• A) Protective covenant.
• B) Tombstone clause.
• C) Preemptive right provision.
• D) Regulation A provision.
• E) Green Shoe provision.

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Definitions:

Freedom

The authority or freedom to behave, communicate, or consider ideas freely, without any limitations or restrictions.

Habits

Regular practices or routines that are hard to give up and often performed unconsciously.

Automatic System

A type of processing that occurs with little to no conscious thought, often quick and intuitive.

Deliberate System

A cognitive process characterized by slow, logical, and conscious thinking, often involved in making well-thought-out decisions.