Define each of the following terms: f. Investment bank; financial services corporation; financial intermediary
Define each of the following terms:
Investment banks are financial institutions that help companies to raise capital. They advise the company during initial public offerings (IPO) with regards to the design and the appropriate pricing strategy of the securities. They also act as the underwriters by buying the stocks of the companies and then sell them to the investors. They also provide other consulting and advisory services such as asset management and consultation with regards to mergers and acquisitions.
Financial services corporations are the firms which provide financial services to different corporations such as brokerage, insurance, banking or credit rating.
Financial intermediaries are financial institutions like banks, who borrow directly from the providers of capital in return of their stocks, bonds or ownership of saving accounts. The intermediaries then invest these funds and extend loans to the users or borrowers of the capital.
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