Student CA CPT
28 Points
Joined January 2014
While calculating net liability of underwriting firms, the unmarked applications are distributed in the ratio of Gross liability - Marked applications, what's the logic behind this? As for as my understanding is concerned, distributing like above will give more benefit of unmarked application to the firm which sold less shares i.e. having less marked applications. Why should the firm with less marked applications should get more benefit of unmarked applications? What's the reason behind such treatment?