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21-81 an Underwriter Is Quoting the Following Rates for the Issue

Question 88

Multiple Choice

21-81 An underwriter is quoting the following rates for the issue of new securities on behalf of a firm on a firm commitment basis: $64.00-64.25.2,000,000 shares are being offered.

A) The maximum amount that can be earned by the underwriter (ignoring other costs) $1,000,000.
B) The maximum amount that can be earned by the underwriter (ignoring other costs) is $500,000.
C) The minimum amount that can be earned (ignoring other costs) by the underwriter is $0.
D) The minimum amount that can be earned (ignoring other costs) by the underwriter is -$500,000.
E) The minimum amount that can be earned (ignoring other costs) by the underwriter is -$1,000,000.

Correct Answer: