Question

Which of the following is a security issue in which the investment bank guarantees the issuer a price for newly issued securities by buying the whole issue at a fixed price from the security issuer, and where the investment bank then seeks to resell the securities to investors at a higher price? Best efforts underwriting, Venture capital, Underwriter's spread Firm commitment underwriting

Answer 1

Firm commitment underwriting , or known as bought deal in which  bank guarantees the issuer a price for newly issued securities by buying the whole issue at a fixed price from the security issuer at bid price and resell the securities to investors at a higher price