When a group of underwriters jointly works together to sell a new issue of securities, the underwriters form a(n):
A)underwriting cartel.
B)market union.
C)venture capital association.
D)Dutch market.
E)syndicate.

Question

Quizplus · Accepted Answer

When a group of underwriters jointly works together to sell a new issue of securities, they form a syndicate. This is a common practice in investment banking where the risks and profits associated with underwriting a new issue of securities are spread among a group of underwriters. The syndicate is typically led by the lead underwriter who coordinates the efforts of the other underwriters and allocates securities to them based on their level of participation or commitment.

When a Group of Underwriters Jointly Works Together to Sell