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WAEC Economics 2013 Question 9

Question 9

Financial Institutions

Which of the following is a function of merchant banks?

  1. A.Acting as bankers' bank.
  2. B.Lending to the commercial banks as a last resort.
  3. C.Controlling inflation in the economy.
  4. D.Underwriting and issuing of shares.
Show the answer and explanation

Answer: D (Underwriting and issuing of shares.)

Explanation

Merchant banks help companies issue and underwrite shares; the other functions belong to the central bank.