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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.
An underwriter for newly issued bonds profits through _______.
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An underwriting spread. The underwriter earns a profit, based on the difference between its purchase price and the selling price.
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.
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.