How long must a broker-dealer continue to deliver prospectuses for an IPO after the deal has closed?

The correct answer is that a broker-dealer must continue to deliver prospectuses for an initial public offering (IPO) for a period of 25 days after the deal has closed. This requirement is in place to ensure that potential investors have access to the necessary information about the company and its securities following the offering.

During this 25-day period, investors can better evaluate the investment's risks and benefits, as new investors are often attracted to the stock after it begins trading. This time allows for any questions or concerns about the IPO and its performance to be addressed through the provided prospectus.

Choosing a duration shorter than 25 days would not provide sufficient time for prospective investors to make informed decisions, while a duration longer than what is mandated could create unnecessary obligations for the broker-dealer without additional benefits to the investors. Thus, the 25-day requirement strikes a balance between investor protection and practical considerations for broker-dealers.