Question

Investment bankers who join together to share the financial risk associated with buying an entire issue of new securities and reselling them to the public is called a(n)A) selling group.B) tombstone group.C) underwriting syndicate.D) primary market group.

Answer 1

Answer:

C.

Explanation:

Syndicate is a group of investment banks that work together to sell new security offerings to investors. The underwriting syndicate is led by the lead underwriter.

The issuing firm may decide that several underwriters are needed to underwrite the equity.

The size of the syndicate varies.

The primary underwriter is designated the Lead underwriter.

The lead underwriter allocates portions of the offering to syndicate members.

Syndicate members may be lead underwriters on other offerings, so the relationships are frequently based on equal stature in terms of mutual respect.