An Investment Bank May Take a Big Loss When Underwriting

Multiple Choice

An investment bank may take a big loss when underwriting an issue on a firm commitment basis because

A) it may overestimate the demand for the shares by the market.
B) it may underestimate the demand for the shares by the market.
C) interest rates may rise during the offering period.
D) security prices in general may increase during this period.
E) It may run out of shares to sell into the market...