SIE Exam Practice Question 397
Question: 397
In the business of underwriting, when a firm adopts a firm commitment, it is acting as a:
Correct Answer: D
Explanation:
D: Firm commitment implies the syndicate is purchasing the new issue from the issuer with a view to retailing it to the investing public….this is acting in a principal/dealer capacity. Best efforts underwritings are being done on an agency/brokerage basis.
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