Chapter 2

Question 1

Money markets
Fixed income markets
Equity markets
Alternative markets
Currency markets

Answer 1

Types of Capital Markets

Question 2

This is when the investment banker agrees to sell the securities by working really hard to attract investors. If not, then the unsold shares are returned to the issuer. Issuer assumes risk

Answer 2

Best Efforts

Question 3

This constitutes the majority of primary market offerings, the bank agrees to a firm price to purchase the securities and then holds the right to sell those securities to the public. IB assumes price risk

Answer 3

Firm Commitment