A type of underwriting where the ﬁrm receives the agreed-upon amount and the underwriter assumes all of the risk is called a _______ underwriting.

Question

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In a firm commitment underwriting, the underwriter assumes all the risk and agrees to purchase all of the securities from the issuer at an agreed-upon price, regardless of whether they are able to sell them to investors. This provides a guaranteed amount of funds to the issuer.

A Type of Underwriting Where the ﬁRm Receives the Agreed-Upon