Market stabilization:
A) is the action by the managing investment dealer to keep the price of newly issued securities from rising quickly.
B) usually lasts 3-6 days but can last up to 60 days if a security is difficult to distribute.
C) can always keep prices of securities from falling.
D) is accomplished by repurchasing securities as the market price moves below the initial public offering price.

Question

Quizplus · Accepted Answer

Market stabilization is accomplished by repurchasing securities as the market price moves below the initial public offering price. This helps to prevent the securities from plummeting too quickly and allows for a more controlled market stabilization. Options A and B are not accurate descriptions of market stabilization, and option C is not always true as market factors can still cause prices to fall despite stabilization efforts.

Market Stabilization