What Is the Major Reason That Underwriters Tend to Offer

question 23

Multiple Choice

What is the major reason that underwriters tend to offer stocks in an IPO at a price that is below that which the market will pay?

• A) to gain from the rise in value of any stocks they hold after the IPO
• B) to reduce their exposure to losses from unsold stock
• C) to benefit from greenshoe provisions
• D) to increase their spread

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Definitions:

Floating Caliper

A type of brake caliper that moves in relation to the rotor's motion to allow for uniform wear and consistent braking pressure.

Fixed Caliper

Disc brake calipers that are mounted directly to the steering knuckle. Each piston receives equal fluid pressure and pushes on a brake pad. This type of caliper is used mainly in high-performance applications.

Sliding Caliper

A type of floating disc brake caliper that is mounted on sliding keyways.

Disc Brakes

A type of brake system where brake pads apply pressure to a disc or rotor attached to the wheel, slowing or stopping the vehicle.