ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The main role of the investment bank is to advise the businesses on how to meet their financial needs and assist in raising their finances. The services of investment banks include underwriting, which involves assistance provided to corporations in issuing debt or equity securities.

Detailed explanation-2: -An important financial institution that assists in the initial sale of securities in the primary market is the investment bank.

Detailed explanation-3: -Investment Banks While investment banks facilitate the issuance of bonds and shares in the primary market, they expedite the sales and trading of issued debts and equities between buyers and sellers in the secondary market.

Detailed explanation-4: -An initial public offering (IPO) represents a company’s first major sale of equity securities to the public. Following an IPO, any newly issued stock, while still sold in the primary market, is referred to as a secondary offering.

Detailed explanation-5: -They are sold by the companies, governments, or other entities issuing them, often with the help of investment banks, who underwrite the new issues, setting their price and overseeing their launch. There is a primary market for most types of assets, with equities (stocks) and bonds being the most common.