Question

35. *In an underwriting arrangement, the risk is assumed by the :

A. issuer of the security

B. investment banker

C. commercial banker

D. institutional investor



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Answer 1

Answer:

c) commercial banker

Explanation:

i hope it helps u

Answer 2

Answer:

The correct answer is B. investment banker

Explanation:

From the above question,

They have given :

In an underwriting arrangement, the risk is assumed by the :

A. issuer of the security

B. investment banker

C. commercial banker

D. institutional investor

In an underwriting arrangement, the funding banker assumes the danger of promoting a new difficulty of securities, such as shares or bonds, to investors.

The funding banker buys the securities from the company and then resells them to investors. If the securities do now not promote well, the funding banker may additionally cease up conserving unsold securities and may also incur losses.

However,

         If the securities promote well, the funding banker earns a income on the distinction between the rate at which they offered the securities from the company and the fee at which they offered them to investors. Therefore, the funding banker assumes the hazard related with the underwriting process.

Hence,

     The correct answer is B. investment banker

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