If the Firm Commitment Price Is $15 and One Million

question 112

Multiple Choice

If the firm commitment price is $15 and one million shares are sold in the primary market for $13 and then resold in the secondary market for $13.25,what is the underwriter's profit/loss?

• A)-$2,000,000.
• B)$2,000,000.
• C)-$1,750,000.
• D)$1,750,000.

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Definitions:

Operant Conditioning

A learning strategy in which the level of a specific behavior is adjusted using incentivization or penal measures.

Reinforcement

In behavioral psychology, it is a consequence that strengthens an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Secondary Reinforcer

A stimulus that has acquired reinforcing properties through association with a primary reinforcer, such as money being valued due to its ability to purchase food.

Reinforcer

Any stimulus that, when presented after a response, strengthens the response or increases the likelihood that it will happen again.