Bought Deal Underwriting is a type of underwriting where the brokerage firm acts as principal. The brokerage firm risks its own capital to purchase all of the securities to be issued. If the price of the securities decreases before the brokerage firm has had a chance to resell the securities to its clients, the firm absorbs the loss.
Term of the Minute
Investments that have no guarantee of safety of capital but are a potential for generation of capital gains which can account for 10% to 80% of a balanced portfolio. Examples include common shares, derivatives, convertible bonds, preferred shares and equity mutual funds.