How Does the Size of an Issue Affect the Fees

question 79

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.
• E)Large issues involve a flat fee rather than a spread.

Explain how changes in demand and supply influence market equilibrium price and quantity.

Identify the effects of government interventions, such as taxes, on market prices and quantities.

Recognize conditions that lead to surplus or shortage in the market and their implications on prices.

Understand how technological improvements affect supply, prices, and quantities in the market.

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Definitions:

Crisis Situation

A significant and often sudden event or condition that requires immediate attention and action to protect life, property, or the environment.

Pressure

The psychological experience produced by urgent demands or expectations for a person’s behavior that come from an outside source.

Norms

Shared expectations or rules that guide behavior within a group or society.

Conformity

The action of aligning one's attitudes, beliefs, or behaviors to match those of a group or societal norms, often due to real or perceived social pressure.