The syndicate
1. facilitates the sale of new securities
2. is formed by the originating house
3. creates a secondary market in stocks

Question

Quizplus · Accepted Answer

A syndicate is a temporary alliance of financial services entities formed to handle a large transaction that would be hard to handle individually, such as the sale of new securities, which is facilitated by the syndicate. It is indeed formed by the originating house, which is the lead underwriter in the deal. However, the primary role of a syndicate is not to create a secondary market in stocks; that function is typically performed by stock exchanges and market makers.

The Syndicate 1. Facilitates the Sale of New Securities