IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan Stanley then resells the issue to the U.S. public through its mutual funds.
Morgan Stanley is acting as a(n)
A)asset transformer.
B)asset broker.
C)government regulator.
D)foreign service representative.
E)derivatives trader.

Question

Quizplus · Accepted Answer

Morgan Stanley is acting as an asset transformer by purchasing the stock from IBM and then reselling it to the public, effectively transforming the asset from a corporate issuance to a public investment.

IBM Creates and Sells Additional Stock to the Investment Banker