Because of their lower levels of risk to the underwriter, and smaller issuances have lower spread percentages than large issuances.
The smaller the issue, the higher the fees as a percentage of offering price; hence, the greater the spread.

Question

Quizplus · Accepted Answer

The statement is incorrect. Smaller issuances actually have higher spread percentages as a percentage of offering price, hence the lower the fees. This is because the underwriting risks are higher for smaller issuances.

Because of Their Lower Levels of Risk to the Underwriter