When a Firm Sells a New Issue Through an Investment

question 76

Multiple Choice

When a firm sells a new issue through an investment dealer,the costs incurred:

• A) are the "give up" expense of the spread plus the legal and accounting fees,printing expense,and other small fees.
• B) are the spread to the underwriter that includes all the costs of legal and accounting fees,printing expense,and other small fees.
• C) are dependent upon the number of underwriters in the syndicate.
• D) include the existing audit and accounting fees.

---

Definitions:

Cashier's Check

A check issued by a bank, drawn from its own funds and signed by a cashier or teller, guaranteeing payment to the payee.

Primarily Liable

Being the first or main party responsible for fulfilling a financial or legal obligation.

Fraud in the Factum

Refers to a specific type of fraud where a person is deceived into signing a document not knowing its true nature or essence.

Negotiable Instrument

A written promise or order to pay a fixed amount of money, easily transferable from one party to another.