How Does the Size of an Issue Affect the Fees

question 25

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 total fees for large number of shares released is smaller than that 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.

---

Definitions:

Monica Lewinsky

A former White House intern known for her involvement in a scandalous affair with President Bill Clinton, leading to his impeachment proceedings in 1998.

Humanitarian Mission

An operation conducted to provide aid and relief to people in need, especially in situations of crisis, natural disasters, or conflicts.

Troops

Units of soldiers, typically used to refer collectively to military personnel.

Somalia

A country located in the Horn of Africa, known for its long coastline, history of clan-based society, and recent struggles with instability and piracy.