CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

An underwriter makes a minimal commitment to the issuer if the transaction is handled ______.
A. as a competitive bid
B. on a best-efforts basis
C. as a private placement transaction
Explanation: A best-efforts basis is where the underwriter sells the new issue for a fee, only promising to do its "best" to sell the securities. Thus, the underwriter minimizes its risk exposure.

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User Comment
Shelton be-min, 1(p)44a, 4(s)15
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