New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    What can be the maximum proportion of base size for

    anchor investors can be decided by an issuer at EBP?
    A 10% Correct Answer Incorrect Answer
    B 20% Correct Answer Incorrect Answer
    C 25% Correct Answer Incorrect Answer
    D 30% Correct Answer Incorrect Answer
    E 50% Correct Answer Incorrect Answer

    Solution

    If the issuer opts for anchor portion, the same shall be suitably disclosed in the placement memorandum and the term sheet, along with the relevant quantum (maximum 30%). For hedging purposes, opposite positions are taken. Therefore, in this case, a short futures contract or buying a put option is the right answer as both are opposite positions to long futures contracts.

    Practice Next