If the Net Proceeds Are Greater Than the Gross Proceeds

question 37

Multiple Choice

If the net proceeds are greater than the gross proceeds in an underwritten offering,then

• A)the investment banker made a profit on the spread.
• B)the issuing company underpriced its securities.
• C)the issue fails to occur.
• D)the SEC rescinds the issue.
• E)None of these choices are correct.

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Definitions:

Correlation Coefficient

A statistical measure that describes the size and direction of a relationship between two variables, ranging from -1 to +1.

Behaviorism

A theory of learning based on the idea that all behaviors are acquired through conditioning.

Unconscious Forces

The underlying psychological influences of which we are not aware that affect our thoughts, feelings, and behaviors.

Replication

Repeating a study to see if the effect is reliable.