Multiple choice

What is meant by 'Underwriting' the term frequently used in financial sector?

  1. Under valuation of the assets

  2. The Act of taking on a risk for a fee

  3. Giving a Guarantee that a loan will not become a bad loan

  4. The act of permission to float an IPO

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In finance and insurance, underwriting is the process where a financial service provider takes on financial risk for a fee, such as in insurance policies or securities issuance.