The underwriter's spread is inversely related to the size of the primary offering.

Question

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The underwriter's spread is the difference between the price at which the underwriter buys the securities from the issuer and the price at which the underwriter sells the securities to the public. The larger the primary offering, the more securities the underwriter has to sell, and the lower the price at which the underwriter can sell the securities. This is because there are more buyers for a larger offering, and the underwriter can therefore charge a lower spread.

The Underwriter's Spread Is Inversely Related to the Size of the Primary