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Марина в категроии Английский язык, вопрос открыт 19.01.2018 в 14:36

I. Read the text and determine if the statements are true (T) or false (F).
Once all the paperwork has been completed, the investment banker can proceed
with the actual underwriting of the issue. At a specified time and date, the issuer will
sell all of the stock or bond issue to the investment banking firm at an agreed price. The
investment banker must now distribute the issue to the public at a greater price to earn
its fee. By agreeing to underwrite an issue, the investment banking firm is certifying
the quality of the issue to the public. Investors trust the investment bank’s assessment,
since it is backing up its opinion by actually purchasing securities in the process of
underwriting them.
The investment banking firm is clearly taking a huge risk at this point. One way
that it can reduce the risk is by forming a syndicate, which is a group of investment
banking firms, each of which buys a portion of the security issue. Each firm in the
syndicate is then responsible for reselling its share of the securities. Most securities
issues are sold by syndicates because it is such an effective way to spread the risk
among many different firms.
Investment banks advertise upcoming securities offerings with ads in the Wall
Street Journal. The longer the investment banker holds the securities before reselling
them to the public, the greater the risk that a negative price change will cause losses.
One way to speed the sale of securities is to solicit offers to buy the securities from
investors prior to the date the bankers actually take ownership of the securities issue.
Then, when the securities are available, the orders are filled and the securities are
quickly transferred to the final buyers. The investment bank’s goal is to fully subscribe
the issue through brokerage firms and their nation-wide sales offices. Securities issues
may also be undersubscribed or oversubscribed. Both situations are to be avoided by
the investment banker.
1. Underwriting is the process by which investment bankers raise investment
capital from corporations on behalf of investors and governments that are issuing
securities (both equity and debt).
2. An underwriter syndicate is usually formed when an issue is too large for
a single firm to handle.
3. The syndicate is compensated by the underwriting spread, which is the
difference between the price paid to the issuer and the price received by investors and
other broker-dealers.
4. An underwriting syndicate mitigates risk, especially for the lead
underwriter, by spreading it out among all the participants in the syndicate.
5. At a specified time and date, the issuer will sell all of the stock or bond
issue to the public or to the underwriting firm.
6. The longer the investment banker holds the securities before reselling
them to the public, the lower the risk that a negative price change will cause losses.
7. Oversubscription is bad because if there is more demand for a public
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offering than there is supply, it means a higher price could have been charged and the
issuer could have raised more capital.
8. It is serious for an issue to be oversubscribed, since it may be necessary to
lower the price below the price the investment banker paid to the issuer in order to sell
all of the securities to the public.
9. Investment banks speed the sale of securities by soliciting offers to buy
the securities from issuers prior to the date the bankers actually take ownership of the
securities issue.
10. The investment banking firm stands to lose extremely large amounts of
money because of the volume of securitiesinvolved.