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Finra Exam Series-7 Topic 3 Question 113 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 113
Topic #: 3
[All Series-7 Questions]

In a securities underwriting a participating firm is said to be liable severally but not jointly.

What is this type of underwriting is called?

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Suggested Answer: A

a Western account. In a Western account each underwriter has a divided liability and is responsible only for his portion of the issue. In Eastern accounts, generally used for municipal issues, the underwriter is responsible for a percentage of any unsold portion. This is called an undivided liability.


by Ilda at Jul 04, 2025, 01:42 AM

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Dudley
1 days ago
I agree with Marti, because in a best efforts offering, the underwriter is not responsible for any unsold shares.
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Marti
2 days ago
I think the answer is C) a best efforts offering.
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