The Difference Between What the Investment Bank Gets from Selling

question 27

Multiple Choice

The difference between what the investment bank gets from selling securities to public investors and what they pay to the issuing firm is known as:

• A)IPO underpricing
• B)due diligence
• C)firm commitment
• D)best efforts
• E)underwriting spread

---

Definitions:

Limited Liability Partnership (LLP)

A limited liability partnership combines the limited liability advantage of a corporation with the tax advantages of a partnership.

General Partnership

A business arrangement where two or more individuals share ownership, as well as the profits, liabilities, and management duties.

Hedge Funds

Hedge funds are investment funds that employ various strategies to earn active returns for their investors, often engaging in leveraged, long, short, and derivative positions.

Private Equity Funds

Investment funds that gather capital from wealthy individuals or institutions to invest in buying and reorganizing private companies.