IB Fundamentals Flashcards
(10 cards)
Investment bankers are intermediaries between business firms and ___________.
investors
A corporation’s first sale of common stock to the investing public is called what?
an Initial Public Offering (IPO)
Underwriting (in the securities markets) refers to:
Investment banks marketing newly issued securities to investors, and purchasing those that are not sold.
Other options include purchasing securities from investors in the secondary market, making loans to buyers of newly issued securities, and finding depositors for commercial banks.
What is the primary role of an originating house in the context of investment banking?
To enter into an agreement to sell a new issue of securities and establish a syndicate for distribution.
What is the primary purpose of a syndicate in the context of investment banking?
To facilitate the marketing and sale of a new issue of securities.
What is the primary characteristic of a best efforts agreement in investment banking?
The investment banker commits to making the best effort to sell the securities without guaranteeing a sale.
What is the primary purpose of a preliminary prospectus in the context of investment banking?
To outline the financial condition of a firm and register a new issue of securities with the SEC.
What agency enforces federal securities laws?
Securities and Exchange Commission
What is private placement?
The nonpublic sale of securities.
What is the primary purpose of full disclosure laws in the context of securities regulation?
To ensure that all investors have access to the same information that could influence their investment decisions.
