The difference between the price an underwriter pays to a securities' issuer and the price at which the securities are offered for sale is called the:

Question

Quizplus · Accepted Answer

The difference between the price an underwriter pays and the price at which the securities are offered for sale is known as the spread. This spread represents the underwriter's compensation, including expenses and profit margins. Thus, option C is the correct answer. The underwriter's costs of purchasing securities (the underwriting spread) differ from the underwriter's fees for distributing securities (the underwriting fee).

The Difference Between the Price an Underwriter Pays to a Securities