The most important function of an underwriter for a promissory note issue is to:
A) provide funding for the corporation.
B) approve the prospectus before distribution to the public.
C) dilute the corporation's equity.
D) buy the issue of securities from the corporation and resell it to investors.

Question

Quizplus · Accepted Answer

The most important function of an underwriter for a promissory note issue is to buy the issue of securities from the corporation and resell it to investors. This ensures that the corporation can raise the necessary funds, and the underwriter earns a profit from the difference between the purchase price and the sale price. The underwriter is not responsible for providing funding for the corporation or diluting its equity, and while they may approve the prospectus, it is not their most important function.

The Most Important Function of an Underwriter for a Promissory