Practice Quiz

FINRA Series 7

Category - Series 7

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In a best efforts distribution of a new non-exempt issue, a broker/dealer:
  1. may allow a selling concession to a bank or trust company
  2. agrees to buy the issue at a specified price
  3. is not required to use an offering circular or prospectus
  4. acts as an agent for the issuer
Explanation
Answer: D - acts as an agent for the issuer. In a best efforts offering the investment banker acts as an agent for the issuer and makes no guarantee about selling the securities.
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