Which of the following statements is correct?
A)Most securities are offered on a best efforts underwriting.
B)In a competitive sale, the bond-issuing firm invites bids from a number of institutional buyers such as mutual funds and pension funds.
C)In a negotiated sale, a single investment bank obtains the exclusive right to originate, underwrite and distribute the new bonds though a one-on-one negotiation process.
D)All of these statements are correct.

Question

Quizplus · Accepted Answer

In a negotiated sale, a single investment bank obtains the exclusive right to originate, underwrite and distribute the new bonds through a one-on-one negotiation process. This statement is correct. Option A is incorrect because most securities can be offered on different types of underwriting, depending on the issuer's preference. Option B is incorrect because a competitive sale involves the bond-issuing firm inviting bids from a number of underwriters, not institutional buyers.

Which of the Following Statements Is Correct