Roadshows

question 41

Multiple Choice

Roadshows:

• A) give companies an opportunity to thank investors who have bought the new issue.
• B) describe the meetings that managers have with investment bankers to select the underwriter to an issue.
• C) provide underwriters and the company's management an opportunity to meet potential investors.
• D) describe the meetings that management has with the SEC to finalize the issue prospectus.

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Definitions:

Bond Issue

The process by which a corporation or government raises capital by selling bonds to investors, which are debt securities obligating the issuer to pay interest at predetermined intervals and to repay the principal at maturity.

Registrar

is an organization or entity responsible for keeping records of bondholders and shareholders for companies and financial institutions.

Default Risk Premium

The portion of a nominal interest rate or bond yield that represents compensation for the possibility of default.

Inflation Premium

The extra yield on an investment that investors require as compensation for the loss of purchasing power due to inflation.