During negotiated underwriting, in whose interest is it that the issued security be fairly priced?
A) the issuing firm but not the underwriter
B) the underwriter but not the issuing firm
C) both the underwriter and the issuing firm
D) neither the underwriter nor the issuing firm

Question

Quizplus · Accepted Answer

In negotiated underwriting, both the issuing firm and the underwriter have an interest in ensuring that the issued security is fairly priced. The issuing firm wants to receive a fair price for the securities and attract investors while the underwriter wants to ensure that the securities are priced optimally to be able to sell them to investors and make a profit. Therefore, it is beneficial for both parties to have the security priced fairly.

During Negotiated Underwriting, in Whose Interest Is It That the Issued