A local government agency of Nebraska issued municipal securities for the purpose of building a community hospital.Austin Hunter Corp. ,a financial services company,decides to purchase these securities from the government and resell them to the investing public.Which of the following describes the process undertaken by Austin Hunter Corp.?

Question

Quizplus · Accepted Answer

Austin Hunter Corp. is acting as an underwriter in this scenario, as they are purchasing the municipal securities from the government and reselling them to the investing public. Underwriting involves assuming the risk of selling securities at a profit or loss by purchasing them from the issuer and then reselling them to investors. Tombstone is a type of advertisement used to announce a new securities issue, limit order refers to an instruction to buy or sell securities at a specified price, and check clearing is the process of transferring funds from one bank account to another.

A Local Government Agency of Nebraska Issued Municipal Securities for the Purpose