Question

QUESTION 14

1. The Lead Underwriter, in an IPO, prepares the issueing firm's application that is made to the SEC

   True

   False

3 points   

QUESTION 15

1. Insurance is the business of risk shifting.

   True

   False

3 points   

QUESTION 16

1. A Treasury security in which the periodic interest payments been separated from the principal repayment and sold as a different security is called
   

   		a T-note
   		a T-bond
   		a Zero Coupon bond
   		a G.O. bond
   		a Revenue bond

Answer 1

14. The correct answer is 'True'. The issuer of securities usually appoints more that one banker for the purpose of making the IPO successful. There is one lead banker among all who is responsible for filing the application of the company with the financial regulator like SEC.

15. The correct answer is 'True'. Insurance is a business in which the insurer purchases the risk of insured for a specified premium. The risk of insured shifted from him to the insurer and he will bear the liability for any damages that may occur in case of any event.

16. The correct answer is 'T - Bond'. A 'T bond is' is a treasury bond which is issued for longer term like 10 to 30 years. These bonds can be converted into STRIPS (Separate trading of registered interest and principal securities by any investment bank). The strips are created usually by big banks by purchase of these bonds and then selling out interest and principal part of the same separately.