Market stabilization
A) is the action by the managing investment banker to keep the price of newly issued securities from falling below the issue price to the public.
B) usually lasts 2-3 days but can last up to 30 days if a security is difficult to distribute.
C) cannot always keep prices of securities from falling-a case in point was the IBM issue, sold in October, l979.
D) all of these.

Question

Quizplus · Accepted Answer

Market stabilization is the action taken by the managing investment banker to keep the price of newly issued securities from falling below the issue price to the public. It usually lasts 2-3 days but can last up to 30 days if a security is difficult to distribute. However, market stabilization cannot always keep prices of securities from falling, as was the case with the IBM issue sold in October 1979. Therefore, all of the given options are correct.

Market Stabilization