Question

QUESTION 2

In an Initial Public Offering the issuing entity will receive the fund proceeds.

True

False

QUESTION 3

In the secondary market both the issuing company and investor receive funds.

True

False

QUESTION 4

One function of an investment banker is to provide underwriting services.

True

False

QUESTION 5

Only a full service broker can buy and sell securities.

True

False

QUESTION 6

A corporation is legally obligated to repay bonds that it has issued.

True

False

QUESTION 7

The value of derivative securities is linked to the value of another security or something else of value.

True

False

QUESTION 8

An insurance company would not be considered a financial institution.

True

False

Answer 1

We are allowed to answer only 4 sub-parts of a question:

2)Ans: The answer is "True"

In the IPO, the issuance happens in the primary market and the proceeds from the IPO go directly to the issuing entity.

3)Ans: The answer is " False"

In the secondary market, the issuer doesn't receive any money. Shares just change investors' hands and only the investor gain from the trade.

4)Ans: The answer is "True"

Investment banks do provide the underwriting service, where the Investment bank takes responsibility for the sale of shares of an entity in the market. This service is called Underwriting

5)Ans: Th answer is "False"

A full-service Broker is a type of broker that offers different services to its clients. The services amount to a large variety that ranges from advice, retirement planning, etc. Other types of brokers can also buy and sell securities.

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