Which of the following statements is true of a competitive municipal bond underwriting?

This statement is inaccurate because competitive underwriting is generally favored by issuers with strong credit ratings. Poor credit typically leads issuers to prefer negotiated underwriting to secure better terms and tailored support from underwriters who understand their specific needs.

This statement describes a negotiated underwriting process rather than a competitive one. In competitive underwriting, the issuer does not solicit proposals; instead, they invite bids from multiple underwriters, making it a more streamlined process focused on the cost of borrowing.

This statement is more characteristic of a negotiated underwriting process, where the underwriter works closely with the issuer to customize bond terms. In competitive underwriting, the focus is primarily on the bids submitted, with less direct engagement in customizing terms prior to bidding.