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1 FINANCE MCQS

An issuance of securities where the investment bank does not guarantee a price but acts as a distributor is called ____________?

  • Best efforts offering
  • Least good index
  • Least good premium
  • Least good discount price
Correct Answer: A. Best efforts offering

Detailed Explanation

In a best efforts offering, the investment bank does not guarantee the issuer a specific price or total sale amount. Instead, the bank agrees to use its best efforts to sell the securities to investors at the best possible price. The risk of unsold securities remains with the issuer, not the bank.

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