Pro rata allocation on the basis of an advance indication of interest means each account for which the shares are suitable: A) and which has expressed an advance indication of interest, shall receive m/n shares, where there are m shares available and indications of interest for n shares. B) shall receive m/n shares, where there are m shares available and n such accounts. C) and which has expressed an advance indication of interest, shall receive w*m shares, where w is the account’s proportional value of all such accounts and there are m shares available. Your answer: B was incorrect. The correct answer was A) and which has expressed an advance indication of interest, shall receive m/n shares, where there are m shares available and indications of interest for n shares. Pro rata allocation on the basis of an advance indication of interest means that all accounts that have expressed an interest in the issue shall receive m/n shares, where there are m shares available and indications of interest for n shares. – This just seems wrong to me, both my original answer and the suggested answer. Shouldn’t be the formula something like individual indication of interest/SUM(all indications of interests from suitable account) * available shares to firm ? What am I missing here?

I think it is: m … available shares to firm n … all indications of interests m/n will be pct not number of shares, you are one step ahead with your calculation

A is right… check out Schweser Q bank Question # 86560 for a similar one …