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11.Early investment banks, unlike commercial banks with limited "money-related” services               and loans, could perform many financial services and were known as             

a.private banks.

b.universal banks.

c.Jay Cooke banks.

d.industrial banks

e.money banks

 

12.The Glass-Steagall Act of 1933 separated

a.insurance from credit.

b.investment banking from mutual funds.

c.investment banking from commercial banking.

d.insurance from mutual funds.

 

13. Which of the following laws is not associated with financial reform legislation in the               wake of the Great Depression?

a.Securities Act

b.Securities Exchange Act

c.Glass-Steagall Act

d.Financial Services Modernization Act

 

14.If a company has never offered securities to the public, the investment banking will offer               the securities in the primary market as

a.a seasoned offering.

b.a rights offering.

c.an IPO.

d.a private placement

e.a best efforts offering.

 

15.The optimum offering price of an underwritten security is called the market equilibrium               price, which is

a.the highest price offered to the issuing firm.

b.the lowest price paid by the investment banker.

c.the highest price which allows the entire issue to be sold quickly at the offering price.

d.the price that will maximize the amount obtained by the investment banker.

 

16.The preliminary and final prospectus provided to prospective investors in a new security               issue is a summary of the

a.registration statement filed with Federal Reserve.

b.public announcement of price and number of securities issued by the SEC.

c.registration statement filed with the SEC.

d.duties of the investment banker in the primary offering.

 

17.Which of the following activities is not performed around the time of new debt security               issue?

a.securing a credit rating from a rating service provider.

b.obtaining the security certificates printed by the Federal Reserve Banks.

c.selecting a transfer agent.

d.selecting a trustee.

 

18.Venture capital investments are characterized by all of the following except

a.Substantial control over management decisions

b.Low-risk investments with low returns

c.A share of capital appreciation

d.Serves as intermediate financing between founders' capital and the IPO

 

19.The best example of an investment banker’s effort to manage the inventory risk in a new               security issue is

a.the formation of a selling group.

b.the formation of an underwriting syndicate.

c.allotting shares of the issue to participating brokers.

d.paying a high price to the issuing firm.

 

20.When an investment banker holds a security inventory to make market in a security it has               just underwritten, it is performing the ________ function in the market.

a.registration

b.dealer

c.broker

d.advisory

 

 

 

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