The Key Difference Between a Negotiated Offer and a Competitive

question 39

Multiple Choice

The key difference between a negotiated offer and a competitive offer is that:

• A)the underwriters can not set the spread in a negotiated bid but can in a competitive offer.
• B)the issuing firm can offer its securities to the highest bidder in a competitive bid but in a negotiated bid only one investment banker is used.
• C)the issuing firm works the underwriter for the best spread in a negotiated bid which will be less than that available in a competitive offer.
• D)the underwriter will not do a full investigation in a negotiated bid because the company is at their mercy, while in a competitive bid the underwriter must be extra diligent.
• E)None of the above.

---

Definitions:

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded by consumers.

Total Revenues

The sum of money a company earns from selling goods or providing services in a specific timeframe.

Demand Schedule

A table that lists the quantities of a good a consumer will buy at different prices.

Total Revenues

The complete sum of money earned from selling goods or services, prior to deducting any costs.