Which of the Following Best Describes a Firm Commitment IPO

question 22

Multiple Choice

Which of the following best describes a firm commitment IPO?

• A) The underwriter purchases the entire issue at a small discount and then resells it at the offer price.
• B) The underwriter sells new issues directly to the public in an online auction.
• C) The underwriter tries to sell the stock for the best possible price but does not guarantee that the stock will be sold.
• D) The underwriter solicits bids from investors and chooses the highest price at which there is sufficient demand to sell the entire issue.

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Definitions:

Impact

The action of one object coming forcibly into contact with another, or a marked effect or influence of something.

Structure

The arrangement or organization of related elements in a system or entity, often providing stability or support.

Organic

In sociology, describes societies that function like a living organism with complex, interdependent systems; in agriculture, refers to food produced without synthetic pesticides or fertilizers.

Society

A community of individuals living together and sharing common traditions, institutions, and collective activities and interests.