Which of the Following Statements Is NOT True

question 22

Multiple Choice

Which of the following statements is NOT true?

• A) In a best-effort offering, the underwriters will suffer a financial loss if the offer price is set too high.
• B) In a best-effort agreement, the issuing firm will lose if the offer price is set too high.
• C) If the underpricing is significant, the investment banking firm will suffer a loss of reputation for failing to price the new issue correctly and raising less money for its client than it could have.
• D) Underpricing is defined as offering new securities for sale at a price below their true value.

---

Definitions:

Frequency Distribution

A summary of how often each value in a set of data occurs, often displayed in a table or graph.

Class Interval

The range of values into which data are grouped for frequency distribution purposes, often used in histograms.

Histogram

A graphical representation of data using bars of different heights to show the frequency of data in successive intervals.

Frequency Polygon

A graphical representation of the distribution of a dataset that shows how often each value occurs, connecting the middle of each interval.