What type of offering allows unsold items to be returned to the issuing corporation?

The correct answer indicates that the best efforts underwriting arrangement allows unsold items to be returned to the issuing corporation. In a best efforts underwriting scenario, the underwriter does not guarantee the sale of all the offered securities but instead agrees to sell as much as possible at the best available price. If some of the securities remain unsold, they can be returned to the issuing company. This arrangement provides flexibility for the issuer, as they are not stuck with excess inventory once the offering is complete.

In contrast, firm commitment underwriting involves the underwriter buying the entire issue from the issuer and then selling it to the public. In this scenario, the underwriter bears the risk for any unsold securities since they must purchase the full issue upfront and cannot return unsold items. All-or-none underwriting requires that all the offered securities must be sold or the offering is canceled entirely; thus, there is no option for returning unsold items. Contingency offerings typically involve conditional aspects, but they don't specifically pertain to the return of unsold items following the sale.

Overall, best efforts underwriting stands out in allowing the flexibility for unsold items to be returned, making it the correct choice.