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Bonds 105: The Process of Issuing Bonds

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1.
Today, investment bankers primarily sell newly issued bonds through online brokerage services.
Choose wisely. There is only one correct answer.
False. Investment bankers sell bonds through a variety of means, including brokerage houses, ads in the financial press, and investor networks.
2.
When investment bankers underwrite bonds, they assume the risks of buying and reselling the new securities.
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True. They assume the risks involved in marketing the new securities.
3.
When helping a corporation or government unit issue bonds, an investment banker may undertake all of the following except _______.
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Guaranteeing bond sales to the public. This is not usually part of the deal.
4.
The Securities and Exchange Commission requires bond issuers to register all newly issued bonds.
Choose wisely. There is only one correct answer.
False. Bonds sold through private placement do not need to be registered with the SEC.
5.
A primary role of investment bankers is to help a corporation invest its capital wisely.
Choose wisely. There is only one correct answer.
False. A primary role of investment bankers is to help a corporation issue securities.