<P> Two major categories of exclusion in insurance underwriting are moral hazard and correlated losses . With a moral hazard, the consequences of the customer's actions are insured, making the customer more likely to take costly actions . For example, bedbugs are typically excluded from homeowners' insurance to avoid paying for the consequence of recklessly bringing in a used mattress . Insured events are generally those outside the control of the customer, for example (typical in life insurance) death by automobile accident, contrasted with death by suicide . Correlated losses are those that can affect a large number of customers at the same time, thus potentially bankrupting the insurance company . This is why typical homeowner's policies cover damage from fire or falling trees (usually affecting an individual house), but not floods or earthquakes (which affect many houses at the same time). </P> <P> In evaluation of a real estate loan, in addition to assessing the borrower, the property itself is scrutinized . Underwriters use the debt service coverage ratio to figure out whether the property is capable of redeeming its own value . </P> <P> Forensic underwriting is the "after - the - fact" process used by lenders to determine what went wrong with a mortgage . Forensic underwriting is a borrower's ability to work out a modification scenario with their current lien holder, not to qualify them for a new loan or a refinance . This is typically done by an underwriter staffed with a team of people who are experienced in every aspect of the real estate field . </P> <P> Underwriting may also refer to financial sponsorship of a venture, and is also used as a term within public broadcasting (both public television and radio) to describe funding given by a company or organization for the operations of the service, in exchange for a mention of their product or service within the station's programming . </P>

Which of the following is an activity typically taken by an underwriter during an ipo of a company