An underwriting agreement is a contract in which the investment banker agrees to underwrite or do its best to sell securities to investors at the highest price it can; the investment banker assumes no risk for the possibility that it may fail to issue all authorized shares .

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An underwriting agreement typically involves the investment banker assuming some level of risk, as they may agree to purchase the securities themselves if they cannot sell them to investors, especially in a firm commitment underwriting.

An Underwriting Agreement Is a Contract in Which the Investment