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Test: Investment Banking - 1 - B Com MCQ


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10 Questions MCQ Test Financial Markets and Institutions - Test: Investment Banking - 1

Test: Investment Banking - 1 for B Com 2024 is part of Financial Markets and Institutions preparation. The Test: Investment Banking - 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Investment Banking - 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Investment Banking - 1 below.
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Test: Investment Banking - 1 - Question 1

What is the primary role of an investment bank in an Initial Public Offering (IPO)?

Detailed Solution for Test: Investment Banking - 1 - Question 1
In an IPO, the primary role of an investment bank is to act as an intermediary to help the company go public. They facilitate the process by underwriting the securities, pricing them, and selling them to investors. This allows the company to raise capital by issuing shares to the public.
Test: Investment Banking - 1 - Question 2

What is one of the key functions of investment banking related to mergers and acquisitions (M&A)?

Detailed Solution for Test: Investment Banking - 1 - Question 2
Investment banks play a significant role in mergers and acquisitions (M&A) by providing advisory services to companies looking to merge with or acquire other firms. They help in negotiating deals, valuing companies, and structuring transactions.
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Test: Investment Banking - 1 - Question 3

What is the main purpose of underwriting in the securities market?

Detailed Solution for Test: Investment Banking - 1 - Question 3
The primary purpose of underwriting in the securities market is to determine the risk and price of a particular security. It involves assessing the security's value and pricing it appropriately for issuance, typically during an initial public offering (IPO).
Test: Investment Banking - 1 - Question 4
What does a debenture trustee do in the context of secured debentures?
Detailed Solution for Test: Investment Banking - 1 - Question 4
In the context of secured debentures, a debenture trustee holds the secured property on behalf of the debenture holders. They ensure that the assets backing the debentures are maintained and can be used to repay debenture holders in case of default.
Test: Investment Banking - 1 - Question 5
What is the main duty of an investment bank when acting as an underwriter for an IPO?
Detailed Solution for Test: Investment Banking - 1 - Question 5
The main duty of an investment bank when acting as an underwriter for an IPO is to facilitate the process of going public for the company. This involves pricing and purchasing the company's securities and then selling them to the public.
Test: Investment Banking - 1 - Question 6
In what situations is a debenture trustee typically appointed?
Detailed Solution for Test: Investment Banking - 1 - Question 6
A debenture trustee is typically appointed when a company issues bonds or debentures to the public. The trustee ensures that the interests of the debenture holders are protected.
Test: Investment Banking - 1 - Question 7
What is one of the duties of a debenture trustee with respect to the creation or enforcement of security for debentures?
Detailed Solution for Test: Investment Banking - 1 - Question 7
One of the duties of a debenture trustee with respect to the creation or enforcement of security for debentures is to ensure that the assets of the company are sufficient to cover the obligations to debenture holders. This includes verifying the adequacy of the assets.
Test: Investment Banking - 1 - Question 8
What role does an investment bank play in mergers and acquisitions (M&A)?
Detailed Solution for Test: Investment Banking - 1 - Question 8
In mergers and acquisitions (M&A), investment banks often play a role in facilitating negotiations between the companies involved. They provide advisory services, valuation expertise, and help structure M&A deals.
Test: Investment Banking - 1 - Question 9
When can a debenture trustee appoint a nominee director on a company's board?
Detailed Solution for Test: Investment Banking - 1 - Question 9
A debenture trustee can appoint a nominee director on a company's board after two consecutive defaults in interest payment. This is a measure taken to protect the interests of debenture holders.
Test: Investment Banking - 1 - Question 10
What is the main purpose of investment banking in an IPO?
Detailed Solution for Test: Investment Banking - 1 - Question 10
The main purpose of investment banking in an IPO is to facilitate the company's transition to public ownership. Investment banks help the company issue shares to the public, allowing it to raise capital and become publicly traded.
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