Banking Investment and Capital Markets Flashcards
6 cards from real Banking Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Banking Investment and Capital Markets flashcards as text
What is the primary function of an investment bank?
Answer: Underwrite and distribute securities for corporations and governments
Investment banks help corporations and governments raise capital by underwriting and distributing securities such as stocks and bonds.
In the context of capital markets, what does an IPO stand for?
Answer: Initial Public Offering
An Initial Public Offering (IPO) is the process by which a private company first sells its shares to the public on a stock exchange.
Which of the following best describes a bond?
Answer: A debt instrument where the issuer borrows money and pays periodic interest
A bond is a fixed-income instrument representing a loan made by an investor to a borrower, with agreed-upon interest payments and a maturity date.
What is the role of an underwriter in a securities offering?
Answer: They guarantee the purchase of unsold shares and manage the offering process
An underwriter agrees to buy any unsold shares in a securities offering, assuming the risk of distribution and ensuring the issuer raises the intended capital.
Which US regulatory body oversees securities markets and protects investors?
Answer: SEC (Securities and Exchange Commission)
The Securities and Exchange Commission (SEC) is the primary US federal agency responsible for regulating securities markets and enforcing securities laws.
What is market capitalization?
Answer: The total market value of a company's outstanding shares
Market capitalization is calculated by multiplying a company's total outstanding shares by the current market price per share.