Investment bankers ________ new issues of bonds or stocks by purchasing, at a discount, the entire stock or bond issue of a firm and selling the issue to interested investors at a higher price.

Question

Quizplus · Accepted Answer

Investment bankers underwrite new issues of bonds or stocks by guaranteeing to purchase the entire stock or bond issue of a firm at a discount and then selling the issue to interested investors at a higher price. This helps the issuing firm to secure funding while ensuring that the investment bank is compensated for taking on the risk of selling the new securities to investors.

Investment Bankers ________ New Issues of Bonds or Stocks by Purchasing