When investment banks facilitate securities underwriting, what are they primarily doing?

Investment banks play a crucial role in securities underwriting by organizing initial public offerings (IPOs). During an IPO, a company offers its shares to the public for the first time, and investment banks help navigate this complex process. They assist companies in determining the appropriate price for the shares, preparing the necessary paperwork, conducting due diligence, and marketing the shares to potential investors.

Additionally, investment banks often provide a guarantee to buy any unsold shares, which gives companies the confidence to proceed with the IPO. This service is fundamental to helping businesses access capital from the public markets, and it highlights the investment banks' expertise in analyzing market conditions and investor demand.

The other options do not capture the primary role of investment banks in the context of securities underwriting. Helping businesses in bankruptcy relates more to restructuring and financial advisory services, setting fixed interest rates concerns the broader monetary policy and bond markets, and managing hedge funds refers to a separate aspect of investment management. Thus, organizing initial public offerings encapsulates the primary function of investment banks in the underwriting process.