Investment Bankers Are Not Really Like Commercial "Bankers" in the Sense

question 17

True/False

Investment bankers are not really like commercial "bankers" in the sense of taking deposits and issuing loans;rather,they help firms issue securities in the secondary market and their activities are limited to raising new equity capital.

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Definitions:

Bond Ratings

A system used to assess the credit quality and risk level of bonds, typically assigned by rating agencies.

Sinking Fund Provisions

A requirement for a debtor to set aside funds at regular intervals to repay a bond or loan before its maturity in order to ensure the safety of the investment for creditors.

Bond Issue

The process by which a government or corporation raises funds by issuing bonds to investors, who lend them money in exchange for periodic interest payments and the return of principal at maturity.

Call Provision

A feature of a bond or other fixed-income security that allows the issuer to repurchase and retire the debt before its maturity date.