Definition of "Underwritting"

Dorothea Bogert
Dorothea Bogert FL Realty

The acceptance of risk in return for payment. In a new securities issue, the underwriter, known as the underwritting function by purchasing the securities of a real estate company at a fixed price from the issuer, expecting to sell them at a higher offering price and making a profit on the spread. Underwritting is the function of investment bankers, who usually form an underwriting group, also called a syndicate, to pool the risk and assure successful distribution of the issue.

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