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| What is Underwriting?
Underwriting means the same things as insuring. Banks and insurance companies are mainly the ones who use underwriting. When an insurance company accepts your insurance then anything happens to the customer while he is secured, the company will pay for medical bills while the costumer pays his fee. Also banks which purpose mainly is to invest buy securities and after the purchase it’s their responsibility to sell it to the common folk or to other investors to get their initial investment back.
Underwriting began with people signing their name and assuming how much risk they can take for a specific profit. When securities are issued this are usually approved by a an underwriting syndicate. And this syndicate is made out of firms which signed a risk taking agreement. Each company from the syndicate will try to sell those securities to gain profit. | | | | |
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