Concept:Merchant banks specialise in corporate finance activities such as managing capital issues for companies.
Explanation:Acting as a banker's bank is the function of the central bank, not merchant banks.
Lending to commercial banks as a last resort is also performed by the central bank.
Controlling inflation is a monetary policy function of the central bank.
Merchant banks mainly help companies raise capital from the public.
They do this by underwriting and issuing shares on behalf of firms.
This makes underwriting and issuing of shares a key function of merchant banks.
Answer:D. Underwriting and issuing of shares