Under a ________ agreement,the underwriter agrees to purchase all of the shares in a company's public offering and then resells them to investors.

Question

Quizplus · Accepted Answer

A firm commitment agreement is when the underwriter agrees to purchase all of the shares in a company's public offering and resell them to investors. This means that the underwriter takes on the risk of not being able to resell the shares and must purchase them regardless. The other options (best effort, lock-up, final price) do not involve this level of commitment by the underwriter.

Under a ________ Agreement,the Underwriter Agrees to Purchase All of the Shares