Which One of the Following Statements Related to IPO Underpricing

question 69

Multiple Choice

Which one of the following statements related to IPO underpricing is correct?

• A) The IPOs of larger-sized firms tend to be more underpriced than the IPOs of smaller-sized firms.
• B) IPO underpricing is limited to the U.S. markets.
• C) The percent of underpricing remains stable over time in the U.S.
• D) The only period in the U.S. when underpricing produced first day returns of 50 percent or more was during the tech bubble of 1999-2000.
• E) Some of the greatest IPO underpricing has occurred in China.

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Definitions:

Misery Index

An economic indicator created by summing the unemployment rate and inflation rate, intending to measure economic discomfort within a country.

Financial Industry

A sector of the economy that includes businesses and institutions that provide financial services, such as banking, investment, and insurance.

Stimulus

Economic measures taken by the government to encourage growth or prevent economic slowdown, often through spending or tax cuts.

Disinflation

A reduction in the rate of inflation; a slowdown in the rate at which prices increase.