Final answer:
Underwriters sell securities to brokerage houses, which in turn sell these securities to the public. This forms part of the capital flow in financial markets, facilitated by financial intermediaries.
Step-by-step explanation:
Underwriters are investment banking firms that purchase securities from the issuing corporation with the intent to sell them to brokerage houses, which then sell them to the public. This process is part of the financial markets where banks serve as financial intermediaries coordinating supply and demand in the financial capital market. The process highlights the flow of capital from investors to companies that require funds to grow and operate. Financial intermediaries, including banks, venture capitalists, and angel investors, play crucial roles in ensuring that the economy has a healthy flow of capital to support business activities.