Which of the Following Is Generally True of IPO Pops

question 65

Multiple Choice

Which of the following is generally true of IPO Pops?

• A)Most IPO Pops don't last and the stocks usually underperform.
• B)A rapid drop in price of the stock occurs when trading begins.
• C)The IPOs are overpriced and are rewarding to investors from the secondary market.
• D)The strategy useful only to high net worth investors.

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Definitions:

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of the shareholders.

Balance Sheet

A financial statement that presents the assets, liabilities, and equity of a company at a specific point in time, giving a snapshot of its financial condition.

Liabilities

Financial obligations or debts that a company owes to others, such as loans, accounts payable, and mortgages.

Purchasing Policy

The price and timing of raw materials and other goods and services necessary to build, sell, and support products.