Statement II is correct. In an "underwritten offering," the underwriter buys an issue and then attempts to sell the issue to investors.
Statement I is incorrect. In a "best effort offering," the underwriters do not buy the issue, they only act as a broker.
Statement III is incorrect. Underwritten offerings are the most common type of offering because they ensure the success of the proposed issue of shares by providing some insurance against under-subscription. Any shares not taken up by investors are held by the underwriter, thereby ensuring that the issuer gets to generate the amount of cash targeted. In addition, the underwriter offers expert advice and is in charge of marketing the offer. This ensures that the issuer's human resources are not stretched and paves the way for a smooth transition. Things to Remember

1. An underwritten offering is a type of public offering. The underwriter guarantees a certain price for a certain number of securities to the party that is issuing the security (the issuer). Thus, the issuer is secure that they will raise a certain minimum from the issue, while the underwriter takes the risk of the issue not being fully subscribed to.
2. In a best efforts offering, the underwriters act as agents who try to sell as much of the securities as they can for the issuer. However, they do not guarantee the amount raised, but will try to sell as much as they can.
3. The choice between an underwritten and best efforts offering depends on the issuer's need for certainty of raising a certain amount, and the willingness to pay for that certainty. In general, underwritten offerings are more common because they provide more assurance of success for the issuer.