What is the primary role of investment banks?

The primary role of investment banks is to assist firms in issuing securities and provide financial advisory services. This includes helping companies raise capital by underwriting new debt and equity securities, which involves evaluating the company’s needs, pricing the securities, and marketing them to investors. Investment banks also offer strategic advisory services for mergers and acquisitions, restructurings, and other complex financial transactions.

This role is vital for businesses looking to navigate the complexities of the financial markets, as investment banks bring expertise and connections to facilitate these processes. They serve as intermediaries between the issuers of securities and the investing public, ensuring that companies can fund their operations and grow while providing investors with opportunities to participate in these businesses.

The other options represent functions that are typically outside the purview of investment banks. For instance, providing personal loans or banking services is more aligned with retail banks, while buying and selling real estate would fall under the activities of real estate firms. Thus, investment banks are specialized entities focusing on capital markets and corporate finance activities.