Series 7 Exam Question 240: Answer and Explanation

Question: 240

DEF Corporation issued stock to the public at $9 per share. If the manager's fee was $0.15 per share, the takedown was $0.50 per share, and the concession was $0.30 per share, what was the spread?

• A. $0.45
• B. $0.65
• C. $0.80
• D. $0.95

Correct Answer: B

Explanation:

B. The spread is the sum of the manager's fee ($0.15) and the takedown ($0.50): $0.15 + $0.50 = $0.65. The selling concession is paid out of the takedown and is not added to the spread equation.