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The Key Difference Between a Negotiated Offer and a Competitive

Question 24

Multiple Choice

The key difference between a negotiated offer and a competitive offer is that:

A) the underwriters cannot set the spread in a negotiated bid but can in a competitive offer.
B) the issuing firm can offer its securities to the highest bidder in a competitive bid but in a negotiated bid only one investment banker is used.
C) the issuing firm works the underwriter for the best spread in a negotiated bid which will be less than that available in a competitive offer.
D) the underwriter will not do a full investigation in a negotiated bid because the company is at their mercy, while in a competitive bid the underwriter must be extra diligent.
E) None of these.

Correct Answer: