Commercial bank underwrites the shares and bonds of joint stock companies.

True

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False

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Solution

The correct option is A True
A commercial bank is a financial institution which accepts deposit from people and offers secured loan for the purpose of consumption or investment. The commercial banks also underwrites the shares and bonds of joint stock company for which they charge very high fees and if the shares and bonds remain unsold then they buy it at the nominal rates quoted by the company.

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Similar questions

Consider the following functions:
1. Issue of bank notes of all denominations.
2. Lender of the last resort
3. Underwrite the loans of state and central governments.
4. Periodic inspection of commercial banks
Which of the above are functions of the Reserve Bank of India?

___ is/are issued by commercial banks or developmental financial institutions to individuals, institutions, cooperations, and companies.

Q. The form of commercial organisation suitable to carry large scale business is Joint stock company.

Q.
A Joint Stock Company is a form of commercial organisation owned by large number of investors (shareholders).

Shares of a joint stock company can be easily bought and sold in the market.

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