If an issue of securities is overpriced, the underwriters may let the price fall to sell the securities.

Question

If an issue of securities is overpriced, the underwriters may let the price fall to sell the securities.​

Quizplus · Accepted Answer

If securities are overpriced, there may not be enough demand from investors to buy them at that high price. In this case, the underwriters may lower the price to entice more buyers and sell the securities. This can result in the price falling, but it is not the intention of the underwriters to let the price fall.

If an Issue of Securities Is Overpriced, the Underwriters May