An underwriter serves as an intermediary between an issuer of a security and an investor. In this capacity, an underwriter buys an issue of securities from a company and resells it to investors. As an underwriter, a person (or firm) bears the risk of selling the securities to the public and guarantees the proceeds from the sale, essentially taking ownership of the securities. If the underwriter can’t sell the securities at the asking price, he/it may have to sell them for less than he/it paid or retain the securities himself/itself.

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