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Question
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.
Answer
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