As the chief financial officer (CFO), you identify that your firm needs to raise additionalfunds by selling new shares of stock. Which of the following refers to a specialist that assists corporations in the issue and sale of new securities? A. An investment bankerB. A commodities brokerC. An officer of the Securities and Exchanges Commission (SEC) D. An institutional investor advisor

Question

Business

Lydia Osborne

7 December, 07:32

As the chief financial officer (CFO), you identify that your firm needs to raise additionalfunds by selling new shares of stock. Which of the following refers to a specialist that assists corporations in the issue and sale of new securities? A. An investment bankerB. A commodities brokerC. An officer of the Securities and Exchanges Commission (SEC) D. An institutional investor advisor

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Answers (1)

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Ellen Patrick · Answer 1

The correct option is A, an investment banker

Explanation:

Investment banks normally underwrites large issue of stock by buying the entire issue of shares at a discounted price to its face value and then selling them to individual or institutional investors at the face value, thereby making as a profit the spread between the face value and the discounted price.

The CFO would probably have to contact a prominent investment bank that has, based on track record, handled similar transactions in the past and recorded high success rate.