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Course Catalog
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Bonds
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100
Bonds 105:
The Process of Issuing Bonds
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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Review your answers below to learn more.
1.
A primary role of investment bankers is to help a corporation invest its capital wisely.
Choose wisely. There is only one correct answer.
True
False
False. A primary role of investment bankers is to help a corporation issue securities.
2.
An underwriter for newly issued bonds profits through _______.
Choose wisely. There is only one correct answer.
Commissions
Set fees
An underwriting spread
Best effort rates
An underwriting spread. The underwriter earns a profit, based on the difference between its purchase price and the selling price.
3.
Investment bankers generally work with an organization only when it issues bonds or stocks.
Choose wisely. There is only one correct answer.
True
False
False. Investment bankers often work with a corporation or government unit before and after the securities are issued.
4.
The Securities and Exchange Commission requires bond issuers to register all newly issued bonds.
Choose wisely. There is only one correct answer.
True
False
False. Bonds sold through private placement do not need to be registered with the SEC.
5.
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
False
True. They assume the risks involved in marketing the new securities.
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