What term describes the scenario where an investment bank has no risk of incorrectly pricing a security?

Bond Markets MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

PPSCFPSCNTSPakistan govt jobs
Subject
Bond Marketsfinance-mcqs › bond-markets
Published
10 Apr 2023
Last updated
28 May 2026

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Choose the correct answer

Explanation

Option A refers to a minimal premium, which does not guarantee no pricing risk. Option B indicates a low discount but not risk elimination. Option C, best efforts underwriting, means the bank sells securities without guaranteeing the price, thus avoiding mispricing risk. Option D is unrelated to pricing risk in underwriting.

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