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    Question

    Which among the following is the act of taking on a risk

    for a fee?
    A Credit appraisal Correct Answer Incorrect Answer
    B Investment Correct Answer Incorrect Answer
    C Underwriting Correct Answer Incorrect Answer
    D Speculation Correct Answer Incorrect Answer
    E Swap deal Correct Answer Incorrect Answer

    Solution

    Underwriting, in finance, is when individual or an institution undertakes the risk associated with a venture, an investment, or a loan in lieu of a premium. Underwriters are found in banking, insurance, and stock markets. The nomenclature 'underwriting' came about from the practice of having risk takers to write her name below the total risk that she undertakes in return for a specified premium in the early stages of the industrial revolution.

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