SIE Exam Question 663: Answer and Explanation

Question: 663

Regarding municipal bonds, which of the following is the small amount of money, usually less than 5% of an issue, that underwriters give to the issuer in exchange for the right to place part of the issue?

• A. Credit deposit
• B. Down payment
• C. Escrow deposit
• D. Good faith deposit

Correct Answer: D

Explanation:

Regarding municipal bonds, a good faith deposit is the small amount of money, usually less than 5% of an issue, that underwriters give to the issuer in exchange for the right to place part of the issue.