A. Investors indicate to the underwriter how many shares they would like to buy in a new issue and these indications are used to help set the price.

B. The underwriter accepts responsibility only to try to sell the issue.

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424 Part Four Financing Decisions and Market Efficiency C. Some issues are not registered but can be traded freely among qualified institutional buyers.

D. Several tranches of the same security may be sold under the same registration. (A “tranche”

is a batch, a fraction of a larger issue.)