Under a best efforts arrangement, the investment bank purchases all of the shares from the firm and then resells the shares to the public.Under this arrangement the investment banks assumes significant risk.

Question

Quizplus · Accepted Answer

In a best efforts arrangement, the investment bank does not purchase the shares but instead agrees to sell as much of the offering as possible, without guaranteeing the sale of all shares, thus assuming less risk compared to a firm commitment arrangement.

Under a Best Efforts Arrangement, the Investment Bank Purchases All