Question

The primary purpose of a lockup agreement is to ensure:_________a. no research reports are issued during the waiting period. b. an IPO is not underpriced by more than five percent. c. the lead underwriter maintains an economic interest in the IPO it is managing. d. the issuer of new securities receives a minimally agreed upon amount from the issue. e. company insiders maintain an economic interest in the issuer of an IPO for a minimum period of time.

Answer 1

Answer: The correct answer is "e. company insiders maintain an economic interest in the issuer of an IPO for a minimum period of time.".

Explanation: The primary purpose of a lockup agreement is to ensure: company insiders maintain an economic interest in the issuer of an IPO for a minimum period of time.