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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.
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.
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.
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.
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.
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