If an Investor Can Earn 20% on Underpriced IPOs,but Will

question 80

Multiple Choice

If an investor can earn 20% on underpriced IPOs,but will lose 10% on overpriced IPOs in which he was awarded $2,000 worth of the overpriced issue,how much of the underpriced issue must he be awarded in order to gain $500?

• A) $1,500
• B) $2,500
• C) $3,500
• D) $10,000

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Definitions:

Psychological Egoism

The theory that suggests human beings are motivated solely by self-interest, even in what seem to be acts of altruism.

Thomas Hobbes

A 17th-century English philosopher best known for his political philosophy, including the idea that individuals consent to surrender some of their freedoms and submit to the authority of a ruler or government in exchange for protection of their remaining rights.

General Account

A summary or overview that encompasses a wide range of details or information about a specific topic or area of interest.

Egoist

An egoist is someone who acts out of self-interest, prioritizing their own benefits in their decisions and actions, often at the expense of others.