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FINRA Series 7

Category - Series 7

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In the distribution of a new issue, a dealer acting as an underwriter is said to have a:

firm market
divided account
free ride
firm commitment

Explanation

Answer: D - firm commitment. The term underwriting means a guarantee to the issuing corporation. This is a firm commitment, unlike a best efforts offering where there is no guarantee.

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FINRA Series 7

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FINRA Series 7

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