Davidson; Management - 3rd Australasian Edition



1.
Investment banking operations occur in the direct financial market.
A. True
B. False


2.
Universal banking is a combination of investment banking and commercial banking.
A. True
B. False


3.
A security underwriting takes place in the primary market; subsequent trading in the security takes place in the secondary market.
A. True
B. False


4.
A dealer earns a commission for bringing buyers and sellers together.
A. True
B. False


5.
An underwriter's selling group assumes underwriter risk.
A. True
B. False


6.
Discount brokers offer investment advice at prices below full-service security brokerage houses.
A. True
B. False


7.
During the origination of a new security issue, the investment banker provide more than just financing advice to potential clients.
A. True
B. False


8.
Investment banking firms provide both financing and investment services for borrowers and lenders, respectively.
A. True
B. False


9.
Venture capital firms compete with commercial banks for new business loans.
A. True
B. False


10.
Unseasoned offering is also known as initial public offering.
A. True
B. False


11.
In a best efforts issue, an investment banker will guarantee (underwrite) that the issuer will receive a fixed amount of money whether the securities are all sold to investors or not.
   
A. True
B. False


12.
Investment bankers must invest in performing due diligence examinations of potential security issuers.
   
A. True
B. False


13.
Seed financing is the first stage of venture capital financing.
A. True
B. False


14.
A best efforts sale of securities is likely to generate more revenue for the investment banker than an equivalent underwriting of securities.
A. True
B. False


15.
Mezzanine or bridge financing is the interim financing before public offerings of securities.
A. True
B. False


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