Question

The difference between the price at which an investment banking firm buys shares from an issuing company and the price at which those securities are sold in the primary market is called the:_______

a. Bid price
b. Underwriter's spread
c. Asked price
d. Offer price
d. Flotation cost

Answer 1

Answer:

b. Underwriter's spread

Explanation:

Underwriter's spread -

It refers to the difference between the price at which the investment bank buys the share and the price at which the securities are sold in primary market , is referred to as the underwriter's spread .

The underwriter's spread is capable to tell the gross profit margin .

Hence , from the given information of the question,

The correct option is b. Underwriter's spread .