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Best-Efforts Underwriting

Let's discuss a form of underwriting known as agency underwriting. In this scenario, an investment firm serves as a middleman, agreeing to make its best efforts to sell a new issue of securities. However, the firm does not guarantee the issuing company that the securities will be sold. This type of underwriting is commonly used for initial public offerings (IPOs) and can be a valuable tool for companies looking to raise capital.

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