Series 10 Exam Question 34: Answer and Explanation

Question: 34

Once a company decides to raise long-term capital to meet its needs, it will first:

• A. Approach the money market to determine how much capital can be raised.
• B. Hire an underwriter to advise the issuer about the type of securities to issue.
• C. Hire a dealer to issue stock for public purchase.
• D. Hire a broker to issue stock for public purchase.

Correct Answer: B

Explanation:

A business must first hire an underwriter to advise the issuer about the type of securities to issue.