In an "underwriting" the investment banker guarantees the firm selling the securities a specified amount of funds.

Question

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In an underwriting agreement, the investment banker (underwriter) guarantees the issuing company a specific amount of money by buying the securities from the issuer and then selling them to the public or institutional investors, thus assuming the risk of selling the securities at the agreed-upon price.

In an "Underwriting" the Investment Banker Guarantees the Firm Selling