If an Underwriter Charges the Public $40 Per Share for a New

question 40

Multiple Choice

If an underwriter charges the public $40 per share for a new issue after having promised the issuer $38 per share,the spread per share is:

• A) $1.
• B) $2.
• C) $38.
• D) $40.

---

Definitions:

Official Currency

The legally recognized money within a sovereign nation, used for all financial transactions and obligations.

Instrument Payable

A financial document promising to pay a specified amount of money to a person in possession or to their order.

Time Paper

A financial document or instrument that is payable at a future specified date, not upon demand or presentation.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on-demand or at a set time, with the payee’s name either mentioned or left blank.