CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

The process whereby an underwriter purchases securities from a company with the intent to resell them in an IPO is called a ______.

A. mezzanine offering
B. firm commitment
C. best execution
D. primary market offering
Correct Answer: B

User Contributed Comments 3

User Comment
kalps It is a firm commitment as teh underwritier has purchased all the shares
Creg "Mezzanine" refers to the priority level of capital on the balance sheet. It is the middle level between senior debt and common equity. Mezzanine capital usually takes the form of subordinated debt, which senior debt holders (usually banks) view as equity.
leftcoast Mezzanine is also a stage of financing in venture capital
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