A best efforts arrangement is an agreement for the sale of securities in which the investment bank guarantees the sale by purchasing the securities from the issuer,thus agreeing to bear any risks involved in the transaction.

Question

Quizplus · Accepted Answer

In a best efforts arrangement, the investment bank does not guarantee the sale of securities by purchasing them from the issuer. Instead, they use their best efforts to sell the securities to investors and earn a commission on the sales. The issuer bears the risk of any unsold securities.

A Best Efforts Arrangement Is an Agreement for the Sale