Which of the Following Statements Is FALSE

question 25

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)A "road 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.

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Definitions:

Weekly

Pertains to something that occurs, is done or calculated every week.

Basket Of Goods

A fixed set of consumer products and services valued on a regular basis for measuring inflation in an economy or specific market.

Price Changes

Alterations in the cost of goods and services over time, which can be influenced by factors such as supply, demand, and inflation.

Quantity Changes

Variations in the amount of goods and services produced, purchased, or sold, often in response to market demand or supply conditions.