27 Views

Question : What is the primary role of an underwriter in the capital market?

Option 1: Buying and selling securities on behalf of investors
 

Option 2: Facilitating the trading of government bonds
   

Option 3: Assisting companies in issuing securities

 

Option 4: Regulating the stock exchanges


Team Careers360 23rd Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Assisting companies in issuing securities

 


Solution : The correct answer is (c) Assisting companies in issuing securities.

The primary role of an underwriter in the capital market is to assist companies in issuing securities. When a company wants to issue new securities, such as stocks or bonds, it may engage the services of an underwriter. The underwriter acts as an intermediary between the company issuing the securities and potential investors. The underwriter helps the company determine the optimal pricing and structure for the securities being offered. They assess market conditions, investor demand, and other factors to determine the appropriate terms of the securities issuance. This includes determining the offering price, the number of securities to be issued, and the timing of the issuance.The underwriter plays a crucial role in the capital market by facilitating the smooth and efficient issuance of securities, helping companies raise capital, and ensuring that investors have access to investment opportunities.

Related Questions

UEI Global, Hotel Management ...
Apply
Training & Placement Guarantee | Top Recruiters: The Oberoi, Taj, Lee Meridien, Hyatt and many more
VIT Bhopal University | M.Tec...
Apply
M.Tech admissions open @ VIT Bhopal University | Highest CTC 52 LPA | Apply now
Amity University | M.Tech Adm...
Apply
Ranked amongst top 3% universities globally (QS Rankings).
Amity University Noida MBA Ad...
Apply
Amongst top 3% universities globally (QS Rankings)
Graphic Era (Deemed to be Uni...
Apply
NAAC A+ Grade | Among top 100 universities of India (NIRF 2024) | 40 crore+ scholarships distributed
XAT- Xavier Aptitude Test 2026
Apply
75+ years of legacy | #1 Entrance Exam | Score accepted by 250+ BSchools | Apply now
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books