📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    In the Indian debt market, which of the following is a

    key intermediary that guarantees the subscription of a bond issue?
    A Depository Participant (DP) Correct Answer Incorrect Answer
    B Credit Rating Agency (CRA) Correct Answer Incorrect Answer
    C Merchant Banker Correct Answer Incorrect Answer
    D Underwriter Correct Answer Incorrect Answer
    E Registrar and Transfer Agent (RTA) Correct Answer Incorrect Answer

    Solution

    An Underwriter (often a merchant bank or financial institution) guarantees to purchase any unsold portion of a security issue. This ensures that the issuing company raises the intended amount of capital, transferring the subscription risk from the issuer to the underwriter. A CRA (B) provides credit ratings, a DP (A) interfaces with investors for demat accounts, and an RTA (E) maintains investor records.

    Practice Next
    More Accounts Questions
    ask-question