Firm commitment underwriting

Definition:

An underwriting in which an investment banking firm commits to buy and sell an entire issue of stock and assumes all financial responsibility for any unsold shares. Also known as bought deal.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Shakeout

A dramatic change in market conditions that forces speculators to sell their positions, often at a loss.

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