The risk associated with an underwriting rests with the investment bankers.

Name: The risk associated with an underwriting rests with the investment bankers.
Brand: Quizplus
Rating: 4.9 (35 reviews)

Question

The risk associated with an underwriting rests with the investment bankers.​

Quizplus · Accepted Answer

The investment bankers assume the risk associated with the underwriting. This is because they agree to purchase the securities from the issuer at a certain price and then sell them to the public at a higher price. If they are unable to sell all of the securities or if their market value decreases, they may lose money.

The Risk Associated with an Underwriting Rests with the Investment