SIE Exam Question 900: Answer and Explanation

Question: 900

Which of the following is a type of best efforts underwriting that only becomes effective when a minimum amount of securities have been sold? Once the minimum requirement has been met, the underwriter may then sell securities up to a specified level under the terms of the offering.

• A. All or none underwriting
• B. Market out underwriting
• C. Mini-maxi underwriting
• D. Standby underwriting

Correct Answer: C

Explanation:

Mini-maxi underwriting is a type of best efforts underwriting that only becomes effective when a minimum amount of securities have been sold. Once the minimum requirement has been met, the underwriter may then sell securities up to a specified level under the terms of the offering.