What Is the Primary Purpose of a Lockup Agreement

question 32

Multiple Choice

What is the primary purpose of a lockup agreement?

• A)Ensures the lead underwriter maintains an economic interest in the IPO it is managing
• B)Ensures the issuer of new securities receives a minimally agreed upon amount from the issue
• C)Ensures no research reports are issued during the waiting period
• D)Ensures company insiders maintain an economic interest in the issuer of an IPO for a minimum period of time
• E)Ensures an IPO is not underpriced by more than 5 percent