SIE Knowledge of Capital Markets Practice Question 11

Correct Answer: B

Explanation:

B: An underwriting syndicate, led by the legal underwriter, may agree to a best efforts agreement for an IPO. Choice A, the Securities Exchange Commission (SEC), may review the underwriting agreement but will not be a party to it. Choice C, a "standby" agreement, is typically entered into by the issuer and an investment bank, which may not be a lead underwriter or party to the underwriting syndicate. Choice D, the Securities Commissioner of the state in which the security is offered, may review the underwriting agreement but will not be a party to it.