Question

Underwriting new securities issuance requires that the investment banka. purchases securities in the secondary market when they are undervalued. b. provides research and legal advice only to the issuing company. c. buys the issue at a certain price and then sells it in the secondary market. d. provides its best effort to sell the securities, the unsold portion goes back to the issuer. e. buys the issue at a certain price and then sells it in the primary market.

Answer 1

c. buys the issue at a certain price and then sells it in the secondary market.

Step-by-step explanation:

The underwriter of the securities purchases the issue from the original issuer at a price, and sells the issue in primary market. If any portion of the issue remains unsold, the underwriter bears the risk and cannot return it to the issuer.