Underpricing is a technique used by underwriters to ensure the success of an issue.

Name: Underpricing is a technique used by underwriters to ensure the success of an issue.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Underpricing involves setting the offer price of a security lower than its market value to ensure that the issue will be oversubscribed and buyers will be enticed to participate in the issue. This technique is often used by underwriters to guarantee the success of the offering.

Underpricing Is a Technique Used by Underwriters to Ensure the Success