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Exam Series 6 All Questions

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Exam Series 6 topic 1 question 21 discussion

Actual exam question from FINRA's Series 6
Question #: 21
Topic #: 1
[All Series 6 Questions]

The investment banker bears the risk if the securities do not sell in a(n):

  • A. firm commitment underwriting agreement.
  • B. best efforts agreement.
  • C. all-or-nothing commitment.
  • D. None of the above selections are correct. The investment banking firm is never exposed to risk if the securities don’t sell.
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Suggested Answer: A 🗳️
The investment banker bears the risk if the securities do not sell in a firm commitment underwriting agreement. In this type of agreement, the investment banker purchases the security from the issuing firm and is fully exposed to any risk associated with the issue.
by lolojepu at April 6, 2025, 1:10 a.m.

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