13.4Â Â Securities Brokers and Dealers and Invesmtent Banks 1) Which of the following would likely be involved in a new bond offering? A) a commercial bank B) an investment bank C) a broker D) a dealer 2) Unlike brokers, securities dealers A) operate in secondary markets. B) risk capital losses. C) trade “used” securities. D) operate in primary markets. 3) Investment banks operate in the A) secondary market. B) primary market. C) syndicated market. D) money market. 4) The “primary” market is the market for A) hostile takeovers. B) newly-issued securities. C) equities of “blue chip” companies. D) league tables. 5) Unlike dealers, brokers A) deal in the primary market. B) deal in equity and not in debt. C) do not buy or sell for their own account. D) get most of their funds from consumer deposits. 13.5Â Â Venture Capital Funds, Mezzanine Debt Funds, and Hedge Funds 1) Venture capital funds invest in the equity of A) start-up companies. B) IPOs. C) hedge funds. D) convertible debt. 2) Mezzanine debt funds hold quite __________ assets issued by __________ companies. A) risky; small to midsized B) risky; large C) safe; small to midsized D) safe; large 3) A venture capital fund buys the __________ of a new company and hopes to profit from __________. A) debt; repayment of the debt at maturity B) debt; interest payments on that debt C) equity; dividends from the equity D) equity; eventual sale of that equity 4) “Subordinated” debt is one form of __________ debt. A) mezzanine B) uncollateralized C) zero-coupon D) risk-free 5) A mezzanine fund A) will never buy equity in a company. B) may buy only equity in a company. C) may buy a combination of equity and convertible debt in a company. D) may buy a combination of equity and straight debt in a company. 13.6Â Â Banks Versus Nondepository Institutions 1) The Gramm-Leach-Bliley Act of 1999 A) allowed the creating of financial holding companies. B) set conditions under which an FHC can set up a merchant bank. C) brings the U.S. closer to the universal banking model. D) does all of the above. 2) Banks in the United States still cannot A) own finance companies. B) be full-service brokers. C) offer their own mutual funds. D) offer merger advisory services.