A bond house which has bought a big block of securities endangers itself by the high concentration of risk; this risk is usually distributed by having the issue underwritten by a group of banks through what is known as a "syndicate agreement." There are four basic types of syndicate agreements, with several variations. It will suffice to illustrate but one type: Suppose that a bond house takes over the bond issue of a corpora-.tion at 97.5 and that a syndicate is formed, the members of which are offered and agree to take parts of the issue at 98.29 in case the public does not take them at 99.04. The bond house might be successful in closing out the issue directly to purchasers at 99.04, but rather than run the risks attendant on underwriting so large a block, it is content to make a smaller margin of profit through offering the securities to the underwriting syndicate. If the public absorbs the securities at 99.04, the underwriters make 3/4 per cent for having assumed the risk; but if the market offers only 96 the underwriters take them over at 98.29, and thus tie up their funds indefinitely or until the market rises. The members of the underwriting syndicate co-operate to establish and maintain the market for the issue. Bond houses like to participate in syndicates so as to diversify their security offerings and be able to offer such a variety of investments as will be sure to attract and retain customers.