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Bonds 105: The Process of Issuing Bonds

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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 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.
3.
Today, investment bankers primarily sell newly issued bonds through online brokerage services.
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False. Investment bankers sell bonds through a variety of means, including brokerage houses, ads in the financial press, and investor networks.
4.
A primary role of investment bankers is to help a corporation invest its capital wisely.
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False. A primary role of investment bankers is to help a corporation issue securities.
5.
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.