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Question 8

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Essentials Of Investments
Found in: Page 79
Essentials Of Investments

Essentials Of Investments

Book edition 9th
Author(s) Zvi Bodie, Alex Kane, Alan Marcus, Alan J. Marcus
Pages 748 pages
ISBN 9780078034695

Short Answer

What is the role of an underwriter? A prospectus?

An underwriter and underwrites and resells the securities.

A prospectus contains the description of the firm and the security, it is issuing.

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Step by Step Solution

Definition

A party that evaluates and assumes other party’s risk for a payment is known as an underwriter. A prospectus on the other hand is something that contains details and forecasts the course of something.

Explanation of roles

The role of the underwriter is to purchase securities from the issuing company to resell this. The prospectus, on the other hand contains the description of the firm and the security being issued.

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