Ritter's Study of Initial Public Offerings (IPOs) Showed That the Post

question 37

Multiple Choice

Ritter's study of Initial Public Offerings (IPOs) showed that the post offering share performance was:

• A)less than the control group by about 2% in the five years following the IPO.
• B)incorrectly priced at issuance because over the next five years the abnormal returns were
• Greater than zero on average.
• C)immaterial to the pricing of the IPO because future market performance is unknown at
• Issuance.
• D)equal across IPOs, irrespective of risk or which year they were issued.
• E)All of the above.

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Definitions:

Parallel Distribution

A method of distribution where products are sold through channels that are not authorized by the original manufacturer.

Multiple Level Selling

A marketing strategy that involves selling products through a network of distributors or representatives who earn income from both direct sales to customers and the sales of recruited team members.

Multibrand Strategy

A marketing strategy that involves selling multiple competing brands within a single company's portfolio.

Perceived Value

The value a consumer assigns to a product based on their personal assessment rather than its objective market value.