An underwriter usually assumes some of the risk of issuing stock by agreeing to buy all of the stock the firm cannot sell to its clients.

Name: An underwriter usually assumes some of the risk of issuing stock by agreeing to buy all of the stock the firm cannot sell to its clients.
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Question

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This statement is true. The underwriter takes on the risk of purchasing any unsold shares in an initial public offering (IPO) or new stock issuance.

An Underwriter Usually Assumes Some of the Risk of Issuing