When an investment bank commits its own funds to take a risk position in an underlying security, it is known as:
A) underwriting.
B) market making.
C) proprietary trading.
D) organizing a market.
E) brokering.

Question

Quizplus · Accepted Answer

When an investment bank commits its own funds to take a risk position in an underlying security, it is known as proprietary trading. Underwriting involves facilitating the issuance of securities to the public. Market making involves providing liquidity to a particular market by buying and selling securities. Organizing a market involves setting up a platform for securities trading. Brokering involves facilitating transactions between buyers and sellers, usually for a commission.

When an Investment Bank Commits Its Own Funds to Take