A consequence of ________ is that underwriting firms need to expand their capital so that they can commit greater amounts of funds to such deals.

Question

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Accepting bought deals is the consequence that leads underwriting firms to expand their capital so that they can commit greater amounts of funds to such deals. Bought deals involve the underwriter purchasing the entire offering of securities from the issuer, which places a significant amount of risk on the underwriting firm. To mitigate this risk, underwriting firms need to expand their capital so that they can commit greater amounts of funds to these deals.

A Consequence of ________ Is That Underwriting Firms Need to Expand