Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
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.
2.
When investment bankers underwrite bonds, they assume the risks of buying and reselling the new securities.
Choose wisely. There is only one correct answer.
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 _______.
Choose wisely. There is only one correct answer.
Guaranteeing bond sales to the public. This is not usually part of the deal.
4.
An investment banker firm has just sold a newly issued bond through private placement. The purchaser of the bond was most likely _______.
Choose wisely. There is only one correct answer.
An insurance company. Investment bankers may sell newly issued bonds through private placements to institutional investors like insurance companies.
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.