How Does the Size of an Issue Affect the Fees

question 29

Multiple Choice

How does the size of an issue affect the fees charged by underwriters?

• A)Although large issues generally have a smaller spread,the large number of shares released means that the total fees are somewhat larger than for smaller issues.
• B)Large issues generally have a similar spread to small issues and thus attract much greater fees.
• C)Large issues have a reduced spread,which means that the total fees are generally the same as for smaller issues.
• D)Large issues have substantially larger direct costs and,thus,must charge a larger spread in order to be profitable for the underwriter.

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Definitions:

Tracing

A process or technique used to investigate and follow the course or progression of something, often used in contexts such as data analysis, drawing, or medical diagnostic processes.

Tagging

The process of adding identifiers such as tags or labels to something for the purpose of identification or tracking.

Positrons

Subatomic particles with the same mass as electrons but a positive charge, involved in certain types of radioactive decay.

Diagnostic Procedure

A method of examination to identify the presence of a disease or condition in the body.