In marketing a new security issue, the investment banker assumes the risk of not being able to sell the security at a favorable price in each of the following cases EXCEPT _____.

Question

Quizplus · Accepted Answer

In a best efforts offering, the investment banker agrees to sell as much of the issue as possible but does not guarantee the sale of the entire issue, meaning they do not assume the risk of not being able to sell the security at a favorable price. In contrast, in both negotiated and competitively bid underwritings, the investment banker does assume this risk.

In Marketing a New Security Issue, the Investment Banker Assumes