The type of agreement with an investment bank involving the investment bank's underwritten purchase and resale of securities is called:

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A firm commitment is an agreement between an issuer of securities and an investment bank in which the investment bank underwrites the purchase and resale of the securities, taking on the risk of any unsold securities. This is in contrast to a best efforts commitment, where the investment bank only agrees to use its best efforts to sell the securities but does not underwrite them. Due diligence refers to the process of investigating and verifying important information about a company or investment, while making a red herring disclaimer involves providing a preliminary prospectus that includes a disclaimer stating that the information is not complete and may change. Private placement refers to the sale of securities directly to a small number of investors, often without a public offering.

The Type of Agreement with an Investment Bank Involving the Investment