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What do the owners of a newly chartered company contribute in exchange for shares of stock?

• Cash or property

• Bonds

• Securities

How do investment banks sell corporate securities?

• They sell securities directly to the government

• They take securities at wholesale prices and sell them at retail prices

• They sell shares in large blocks to individual investors

What does an investment bank collect for performing its service?

• A fee

• A commission

• A tax

What does underwriting mean for an investment bank?

• Guaranteeing the purchase of stock

• Collecting a commission on sales

• Selling stock without guarantees

Which of the following is NOT a function of investment banks?

• Help firms issue new shares of stock

• Accept deposits from the public

• Help businesses acquire other firms

What is one way investment banks assist small companies?

• By helping them acquire other firms

• By helping them “go public” and sell shares of stock to the public

• By providing government loans

 

What role do brokerage houses play in the process of investment banking?

• They provide loans to the company

• They help investment banks underwrite new stock offerings

• They buy and sell securities on behalf of their investor-clients