Series 7 - General Securities Representative Exam

Preview Mode
Start Training Session

Underwriters' spread can be best described as which of the following?

The difference between the bid and ask price of the underlying security after the underwriting process
A
The difference between the yields on bonds with varying maturity dates after the underwriting process
B
The difference between money paid to a company that issues securities and the amount of money that is raised once the issues are sold
C
The difference between the strike prices of options on the underlying security once underwriting is complete
D
Training

Explanations

The difference between the bid and ask price of the underlying security after the underwriting process IS the Bid-Ask Spread. The difference between the yields on bonds with varying maturity dates after the underwriting process IS Yield Spread. The difference between money paid to a company that issues securities and the amount of money that is raised once the issues are sold IS the correct answer. The difference between the strike prices of options on the underlying security once underwriting is complete IS an options spread

Pricing