Ask Question
23 June, 19:25

A firm commitment arrangement with an investment banker occurs when the: issue is solidly accepted in the market as evidenced by a large price increase. investment banker buys the securities for less than the offering price and accepts the risk of not being able to sell them. spread between the buying and selling price is less than one percent. investment banker sells as much of the security as the market can bear without a price decrease. syndicate is in place to handle the issue.

+2
Answers (1)
  1. 23 June, 20:02
    0
    A firm commitment arrangement with an investment banker occurs when an investment banker buys the securities for less than the offering price and accepts the risk of not being able to sell them.

    The correct option is B.

    Explanation:

    A firm commitment arrangement happens when an investment banker buys the securities for less than the offering price and accepts the risk of not being able to sell them.

    However, the issuer receives a little less money than the offering price but he gets a specific amount for all the security being issued. The risk rests completely on the investment banker.

    Therefore, the correct option is B.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A firm commitment arrangement with an investment banker occurs when the: issue is solidly accepted in the market as evidenced by a large ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers