Question

The underwriting manager of a Western underwriting syndicate has committed to sell $250,000 worth of bonds out of a total offering of $1 million. There are 10 underwriters of this new issue. The firm sells its entire share, but $100,000 worth of the total bonds remains unsold. What is the manager's remaining liability

Answer 1

Answer: $0

Step-by-step explanation:

As this is a Western underwriting syndicate, it means that the underwriting syndicates involved are only responsible for selling their share of the bond issue.

The question says that the firm managed to sell its entire share. As this is the case, the manager has sold the entire amount apportioned to the manager's firm and so the manager's remaining liability is $0.