How does the role of underwriting affect the issuing of securities?
What will be an ideal response?
Answer: The investment bankers who handle the issuing of securities either to the public or to private investors are financial intermediaries, and they must be compensated for the use of their scarce resources. This compensation includes a monetary fee, but it also often includes an underwriting discount, or spread. The underwriting discount between what the corporation receives from issuing the securities and what the public pays for the securities is often a large part of the compensation of the investment bank that underwrites the issue.
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The mortgage contract rate
A) takes into account all finance charges including points. B) is greater than the APR. C) cannot change over the life of the loan. D) is the interest rate applied to the unpaid mortgage balance.
An example of forward quasi-integration would be a large pharmaceutical firm that acquires part interest in a drugstore chain in order to guarantee that its drugs have access to the distribution channel
Indicate whether the statement is true or false