If an Investment Firm Underwrites a Stock Issue the

question 176

Multiple Choice

If an investment firm underwrites a stock issue the

• A) risk of being unable to sell the shares stays with the issuing corporation.
• B) corporation obtains cash immediately from the investment firm.
• C) investment firm has guaranteed profits on the sale of the stock.
• D) issuance of stock is likely to be directly to creditors.

---

Definitions:

Negative Reinforcement

A behavioral principle where the removal of an unfavorable event following a response increases the likelihood of that response being repeated in the future.

Positive Reinforcement

A technique in behavior modification that involves the addition of a rewarding stimulus following a desirable behavior, aiming to increase the likelihood of the behavior's occurrence.

Punishment

The imposition of a penalty as retribution for an offense, or the action of disciplining someone to correct or deter undesirable behavior.

Temporary Effect

A short-term result or consequence that fades over time without long-lasting implications.