The Six Components That Make Up the Total Costs of New

question 30

Multiple Choice

The six components that make up the total costs of new issues are:

• A)the spread; other direct expenses such as filing fees; indirect expenses such as management time; economies of scale; abnormal returns and the Green Shoe option.
• B)the discount; other direct expenses such as filing fees; indirect expenses such as management time; due diligence costs; abnormal returns and the Green Shoe option.
• C)the spread; other direct expenses such as filing fees; indirect expenses such as management time; abnormal returns; underpricing and the Green Shoe option.
• D)the spread; other direct expenses such as filing fees; economies of scale; due diligence costs; abnormal returns and underpricing.
• E)None of the above.

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Definitions:

Tincture

A solution where a solute is dissolved into alcohol, used primarily in medicine or herbalism.

Bid

An offer made by an individual or company to buy a good or service, or to perform a job at a specified price.

Tid

An abbreviation for "ter in die," which is Latin for "three times a day"; commonly used in medical prescriptions to indicate dosing frequency.

Prn

An abbreviation for the Latin phrase "pro re nata," meaning "as the situation demands," often used in medical prescriptions to indicate taking medicine as required.