Some underwriting firms have found the bought deal to be attractive because it:
A) Offers timing flexibility.
B) Reduces the risk of capital loss.
C) Requires greater amounts of funds.
D) a and b only.
E) All of the above.

Question

Quizplus · Accepted Answer

A bought deal offers timing flexibility because the underwriting firm commits to buying the entire issue from the client upfront, allowing for a quicker process. It also reduces the risk of capital loss for the issuer since the underwriting firm absorbs the risk of selling the securities to investors.

Some Underwriting Firms Have Found the Bought Deal to Be