Which of the Following Activities Do the Banks Perform as Dealers

question 22

Multiple Choice

Which of the following activities do the banks perform as dealers in arranging for risk protection for customers from third parties?

• A)Hedging services
• B)Merchant banking services
• C)Investment banking services
• D)Mutual funds services
• E)Security underwriting services

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Definitions:

Interest Rate Price Risk

The potential for an investment’s value to change due to a fluctuation in the absolute level of interest rates, illustrating the inverse relationship between price and interest rates.

Zero Coupon Bond

A bond that does not pay periodic interest payments but instead is issued at a discount to its redemption value.

Foreign Bond

A bond issued in a domestic market by a foreign entity, in the domestic market’s currency, to raise capital from investors in that country.

Canadian Dollars

The Canadian dollar is the currency of Canada, often represented by the symbol C$ or CAD, and it is used throughout the country for financial transactions.