9 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 4th Jan, 2024
Answer (1)
Team Careers360 23rd 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

Amity University, Noida Law A...
Apply
Admissions open for B.A. LL.B (Hons) , B.A. LL.B , BBA LL.B.(Hons) , B.Com.LL.B. (Hons.)
Jindal Global Law School Admi...
Apply
Ranked #1 Law School in India & South Asia by QS- World University Rankings | Merit cum means scholarships | Application Deadline: 31st Jan'25
TAPMI Jaipur MBA Admissions 2025
Apply
67 Years of Established Legacy | Ranked #79 in India by NIRF | Among the only few top 100 B-Schools currently accepting applications
UPES Integrated LLB Admission...
Apply
Ranked #28 amongst Institutions in India by NIRF | Ranked #1 in India for Academic Reputation by QS University Rankings | 16.6 LPA Highest CTC
Chandigarh University Admissi...
Apply
Ranked #1 Among all Private Indian Universities In QS Asia Rankings 2025 | Scholarships worth 210 CR
Great Lakes PGPM & PGDM 2025
Apply
Admissions Open | Globally Recognized by AACSB (US) & AMBA (UK) | 17.3 LPA Avg. CTC for PGPM 2024 | Application Deadline: 1st Dec 2024
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