An Underwriter Issues a Firm Commitment to Sell 1 Million

question 92

Multiple Choice

An underwriter issues a firm commitment to sell 1 million shares at $20 each, including a $2 spread. How much does the issuing firm receive if only 500,000 shares are sold?

• A) $9 million
• B) $10 million
• C) $18 million
• D)$20 million

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Definitions:

EFT Payments

Electronic funds transfer payments involve moving money from one account to another without the exchange of physical money.

Authorize

To give official permission or power to do something.

Bank Statement

A document provided by a bank that summarizes an account holder's financial transactions over a specified period.

Unauthorized Check

An unauthorized check is a check that has been written and signed without the permission or authority of the account holder, often considered a form of fraud.