An arrangement for the sale of a new issue of debt securities in which the investment banking firm typically buys the securities from the issuing firm and then sells the securities in the primary markets, hoping to make a profit, is called a(n) _____.

Question

Quizplus · Accepted Answer

An underwritten arrangement involves the investment bank purchasing the securities from the issuer and then reselling them in the primary market, with the goal of making a profit. This is a common method of distributing new issues of debt securities. The other choices are not accurate descriptions of this type of arrangement.

An Arrangement for the Sale of a New Issue of Debt