Which of the following is a function of merchant banks?
Answer Details
A function of merchant banks is "underwriting and issuing of shares". Merchant banks are financial institutions that provide a range of services to companies and high net worth individuals. One of the services they provide is underwriting and issuing of shares. Underwriting involves the assumption of the risk of buying securities from the issuer and then reselling them to investors. This helps the issuer to raise capital and provides investors with access to new investment opportunities. Issuing of shares involves the creation and sale of new shares in a company, which can be done to raise capital for the company. By underwriting and issuing shares, merchant banks help companies to access capital markets and raise funds for various purposes.