Which of the Following Is a Possible Exception to the Efficient-Market

question 48

Multiple Choice

Which of the following is a possible exception to the efficient-market theory?

• A)Underwriters charge investors more for IPO shares than they pay the issuing firms.
• B)IPO spreads are lower on larger issues.
• C)The issuance of equity is interpreted as an unfavorable signal by investors.
• D)The long-run returns of IPOs tend to underperform the market.

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Definitions:

Challenging Project

A task or initiative that is particularly difficult or demanding, requiring significant effort, skills, and problem-solving.

Tight Deadlines

Refers to situations where there is a very limited amount of time available to complete tasks or projects.

Accommodative Style

A conflict resolution style where one party shows a willingness to meet the needs of others at the expense of their own interests.

Conflict Management

The practice of identifying and handling conflicts in a wise, efficient, and effective manner.