what does underwriting of securities mean?

Answer 1

Usually when a company or corporate is going public (ie wants to raise capital for expansion),they issue the equity(shares) of the company in the form of an IPO(Initial public offering).

Now they employ an Investment bank(IB) to raise the capital. This IB then does an analysis(red herring prospectus and all) and comes up with an evaluation. They also tell the corporate that they will buy the shares from the company and then sell it to the public.
This ensures that the company gets the money irrespective of the public buying of shares.The IB then at their discretion may sell it at a higher cost to the public depending on oversubscriptions. This is underwriting. Securities can be equity or fixed income like Bonds.