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Bonds 105: The Process of Issuing Bonds

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1.
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.
2.
Investment bankers generally work with an organization only when it issues bonds or stocks.
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False. Investment bankers often work with a corporation or government unit before and after the securities are issued.
3.
The Securities and Exchange Commission requires bond issuers to register all newly issued bonds.
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False. Bonds sold through private placement do not need to be registered with the SEC.
4.
Investment bankers serve as an intermediary between the organization issuing securities and the investors who purchase them.
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True. Investment bankers link a corporation or government unit to the capital marketplace.
5.
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.