What does the term “active book” signify in ECM?

The term “active book” in ECM refers to a situation where there is a book order filled with active demand from buyers. This concept is essential for understanding how capital markets operate, particularly when it comes to the issuance of new securities.

An active book signifies that there are multiple buyers interested in purchasing the securities being offered, demonstrating sufficient market interest and demand. In this context, the presence of active buyers can lead to favorable pricing and conditions for the issuer, as demand can influence the pricing dynamics of the transaction.

The other options do not accurately reflect the meaning of "active book." Without a scenario involving active buyer interest, there cannot be a characterization of a book as "active." Understanding this term is crucial for someone preparing for a career in equity capital markets, as it pertains directly to assessing market conditions and making informed strategic decisions during the transaction process.