The Offering Price Is Set to Make the Issue Attractive

question 10

Multiple Choice

The offering price is set to make the issue attractive to the market and provide a good price to the issuer.Which of the following is/are true?

• A)Empirical studies by Ritter have shown that the average firm commitments are over-priced
• On the first day of trading.
• B)Empirical studies have shown that the best efforts sales have over-pricing on the first day
• Of trading.
• C)Some issues such as Shiva which rose dramatically on the first day of trading were viewed
• As successfully priced by the underwriter because it helped build a short-term investment
• Base.
• D)Empirical studies have shown that the average firm commitments are under-priced on the
• first day of trading.
• E)None of the above.

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