Series 7 Exam Question 329: Answer and Explanation

Question: 329

On a competitive bid for a new municipal underwriting, the difference between the syndicate bid and the reoffering price is the

• A. discount price
• B. offering price
• C. spread
• D. bid price

Correct Answer: C

Explanation:

C. On a competitive bid for a new municipal underwriting, the difference between the bid to the issuer and the dollar price at which the underwriter re-offers the bonds to the public is the spread, which, importantly, is also the underwriter's compensation.