1). What is the primary reason an investment banking firm often forms an underwriting syndicate to sell new securities?
(1). What is the primary reason an investment banking firm often forms an underwriting syndicate to sell new securities?
a. To spread the risk associated with the purchase and distribution of a new issue of securities
b. To provide the issuing company with the most competitive underwriting bids
c. To enhance liquidity in high-volume trade of securities by maintaining continuous up-to-date prices for the securities assigned to them
d. To regulate the issuance and trading of stocks and bonds
e. To ensure that the auction trading process is completed in a fair and efficient manner
(2)When issuing new securities, which of the following decisions is made jointly by a corporation and its investment banker?
a. Deciding whether to go for a best-efforts or underwritten issue
b. Deciding which investment banker to use
c. Deciding whether to go for a competitive bid or a negotiated deal with the investment banker
d. Deciding on the investment project for which to raise additional capital
e. Deciding which member of the senior management team deals with the investment banker
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