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Before entering into formal agreements, investment bankers carefully investigate the companies whose securities they underwrite, especially firms going public for the first time. Because the

Before entering into formal agreements, investment bankers carefully investigate the companies whose securities they underwrite, especially firms going public for the first time. Because the investment bankers do not themselves plan to hold the securities, but instead intent to sell them to investors as soon as possible, why are they so concerned about making careful investigations?

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