The "best efforts" method of underwriting is the most common method used in issuances.
This method of underwriting is far less common.

Question

Quizplus · Accepted Answer

The statement is incorrect. The "best efforts" method of underwriting is one of the two main methods used in issuances, the other being the "firm commitment" method. The "best efforts" method involves the underwriter making their best effort to sell the securities to investors, but there is no guarantee that all the securities will be sold. The "firm commitment" method, on the other hand, involves the underwriter purchasing the securities from the issuer and then reselling them to investors at a profit, assuming the risk of any unsold securities themselves.

The "Best Efforts" Method of Underwriting Is the Most Common