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Flashcards in Investment banks Deck (7)
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What was the motivation behind legislation separating commercial banking from investment banking?

Regulators felt that investment banking was much riskier and it had led to bank failures during the great depression


What are the primary services that an investment banker will provide a firm issuing securities?

- Offer advice
- Helps with filing documents
- underwriting of the securities
- provides assistant with marketing issues


Does the fact that a security has passed a FSC review mean that investors can buy the security without having to worry about taking a loss on the investment?

No the FSC determines if the proper documents were filed


Is it better for a security issue to be fully subscribed or oversubscribed?

It is better to be fully subscribed as over subscription means the securities were under priced


What is the difference between a hostile takeover and a merger?

In a hostile takeover the target firm does not want to give the acquiring firm control and tries to prevent this. In a merger both sides work together to accomplish the merge.


What valuable service do dealers provide that facilitates transaction trading and keeping the markets liquid?

Dealers make a market by being readily available to buy or sell securities.


What is the difference between a market order and a limit order?

A market order has brokers buy or sell securities at current market price while a limit order sets the maximum and minimum price for buying and selling securities