Question

Talk on 4 diverse investment banking functions

please answer in essay form

Answer 1

4 diverse investment banking functions are

Securities Underwriting is a process through which investment bankers purchase the securities like shares of corporate, government or municipal bonds and resell them at a profit . They bear the risk of selling the securities and hence charge fees to its clients.
Advisory Services: They take up advisory role when any company wants to raise capital through IPO, private placement, etc. Since they have best idea about current price levels and interest rate scenario they can guide companies in case of mergers and acquisitions and valuation of firms.
Market Making : They help in achieving the price discovery of a stock of a company. They organize road shows, perform calculation, compare with similar companies in the industry, etc to arrive at a price at which stocks can trade. Hence they aid in market making .
Proprietary trading and investment: They execute orders to sell or buy shares on behalf of the clients. They also trade their own surplus amount in high return riskier investments. It also helps in pension and retirement planning for older citizens and individuals who want to start retirement planning.

Please Discuss in case of Doubt

Best of Luck. God Bless
Please Rate Well