A ___________ commitment underwriting is an arrangement where the underwriter pays the issuer a stated amount whether or not the underwriter can sell all of the shares in the issue to investors.

Question

Quizplus · Accepted Answer

In a fixed commitment underwriting, the underwriter agrees to buy the entire issue from the issuer and then resell it to the public. This means the issuer is guaranteed a certain amount of money regardless of whether the underwriter can sell all shares.

A ___________ Commitment Underwriting Is an Arrangement Where the Underwriter