An IPO in which the underwriter purchases the entire issue at a discount and then resells it at the offer price is:

Question

Quizplus · Accepted Answer

This is a description of a firm commitment IPO, where the underwriter takes on the risk of purchasing the entire issue and reselling it at a higher price to investors. In contrast, a best-efforts IPO would have the underwriter only trying to sell the shares but not committing to purchasing the full issue. An auction IPO involves a bidding process to determine the price for the shares, while primary and secondary offerings refer to the type of market in which the shares are being sold (either by the company itself or by existing shareholders).

An IPO in Which the Underwriter Purchases the Entire Issue