Under the _____ method,the underwriter buys the securityfor less than the offering price and accepts the risk of not selling the issue,while under the _____ method,the underwriter does not purchase the shares but merely acts as an agent.

Question

Quizplus · Accepted Answer

Under the firm commitment method, the underwriter buys the securities from the issuer and takes on the risk of not being able to sell them to investors. This is in contrast to the best efforts method, where the underwriter does not purchase the securities and simply acts as an agent to try to sell them to investors. The other options listed are not relevant to this concept.

Under the _____ Method,the Underwriter Buys the Securityfor Less Than