Which of the Following Is True About IPOs

question 93

Multiple Choice

Which of the following is true about IPOs?

• A) There is a moral hazard problem.
• B) There is not a moral hazard problem.
• C) Their sale in the marketplace is stable.
• D) The underpricing is usually small (e.g., 1%).
• E) IPOs are not underpriced if best efforts is used by the underwriter.

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Definitions:

Consortium

An association, typically of several business companies, created to undertake a project that is beyond the resources of any one member.

Barcode

A representation of data regarding the object to which it is attached that is readable by machines, typically used for identification and tracking purposes.

Homoplastic Structures

Structures that occur in different species due to convergent evolution or parallel evolution, not because of a common ancestry.

Wing

A limb adapted for flight found in birds, bats, insects, and some other organisms, facilitating movement through the air.