What is the right answer.. offering, activity, remember, investment, first

Mechanic

A secondary market activity is...

Shelf offering or
An investment banker selling the governament security (like bills, notes, and bonds) to other?

Dont remember the first choice..

Thx

siavosh

Probably i banker was the answer.

I bankers may not underwrite govt securities, but they do assist in selling them - i.e. as agents, rather than secondary sellers.

Shelf registrations are not, incidentally, necessarily bonds - they are also issues of common stock. Only a company listed on a secondary market can make use of a shelf registration.

RobertA

ibankers DO NOT underwrite govt securities!

it said ibankers reselling or selling govt bonds. Ibanks have govt bond positions. when they sell them, they are selling them on the secondary markets.

both others were primary market activiites.

shelf registration is selling bond precleared to be sold on the primary market for hte FIRST TIME. they were simply registered to be sold, then put "on the shelf" when they are eventually sold it is a primary activity.

it was 100% the ibanker answer

draz

billbelemy22, was that the wording, "securities that they already own"? Or was is simply "investment bankers selling govt securities"?

Govts use i bankers to sell securities - i bankers often act as underwriters or middlemen - in these cases they are not necessarily trading them on a secondary market - they are simply in these cases agents for the originator.

In the CFAI text, however, shelf registrations are discussed in the Primary Markets section, so while I don't think the distinction is clear enough in the text or that it was so in the exam, from this context alone I reckon Shelf was (rightly or wrongly) probably wrong.

ramzes

bankers selling EXISTING government securities that they already own...aka TRADING THEM on the second market. everything else was PRIMARY market.

the ibanker one was SECONDARY market activity

soddy1979

I'm not sure, but shelf offering offers you to sell securities whenever you want to when needed (they are on the shelf basically), so this fits well.

...but in the exam I answered "Investment Banker selling Gov't securities" as i-bankers usually dont sell govt securities (the govt sells them itself).

...but, i-bankers are the biggest primary market makers, so Im not sure where this fits with selling govt securities, but u get the point.

confused? so am I.

eagles_dare13

Also found this:

"Shelf registration provides an institutionalized method to issue a secondary offer instantly. Once the shelf registration statement has been filed, the seller typically will receive calls from time to time from a variety of investment banking firms offering to buy securities at a given set of terms and price."

So, i guess shelf registration.

dotamasta

Can you put the question up pls..

dmar

There were so many questions, which had an answer in "grey" area. I really don't understand that what was point of CFA institute in asking such ambigious questions

Jolyn

I'm pretty sure I said the ibanker selling govt securities.