| Billions of dollars worth of new securities reach the market each year. The traditional {{U}}(56) {{/U}} in the primary, markets is called an investment banker. The investment banker's principal activity is to bring sellers and buyers together, thus creating a market. He normally buys the new issue from the issuer at an agreed-upon price and hopes to {{U}}(57) {{/U}} it to the investing public at a {{U}}(58) {{/U}} price. In this capacity, investment bankers are said to underwrite, or guarantee, an issue. Usually, a group of investment bankers joins to underwrite a security offering and form what is called an underwriting syndicate. The {{U}}(59) {{/U}} received by the investment banker in this case is the differential, or spread, between his purchase and resale prices. The risk to the underwriter is that the issue may not attract buyers at a {{U}}(60) {{/U}} differential. |