Series 7 - General Securities Representative Exam

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Which of the following BEST describes a purpose of a syndicate bid?

It helps to stabilize the price of a security in a primary offering
A
It helps to stabilize the price of a security in a secondary offering
B
It helps to add volatility in an otherwise quiet market
C
It helps mutual funds to peg the per share amount of the Net Asset Value (NAV)
D

Explanations

The syndicate bid applies to secondary offerings; not primary offerings. It does not add volatility to a market and may help reduce it. It is used by the syndicate in a new secondary offering, not mutual funds.

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