Question

Which of the following best describes a best efforts underwriting commitment?

Answer 1

Answer:

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Explanation:

Best effort refers to a legal agreement between security issuer and security underwriter, whereby underwriter will agree to do best that it can to sell as many securities as possible of the issuer to the public.

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Answer 2

Answer:

Best efforts underwriting commitment is an agreement that is legal which is in between the security issuer and the security underwriter, and the underwriter agrees to do the best that it can do to sell as many securities as possible of the issuer to the public.

Explanation:

In a best efforts underwriting, the underwriters do not agree to purchase all of the securities from the issuer. Underwriters agree to use their best efforts to sell the securities and act only as an agent of the issuer in marketing the securities to investors.