Which One of the Following Statements Concerning IPOs and Underpricing

question 62

Multiple Choice

Which one of the following statements concerning IPOs and underpricing is correct?

• A)IPO underpricing primarily benefits a firm's pre-issue owners.
• B)IPO underpricing is a function of the underwriting spread.
• C)The more an issue is underpriced, the more it tends to be oversubscribed.
• D)Underpricing tends to discourage investors from participating in the IPO market.
• E)Undersubscribed shares generally tend to also be underpriced shares.

---

Definitions:

Noninvasive Stimulation Technique

A method of stimulating the brain without the need for surgery or implants, often used for therapeutic purposes.

Magnetic Pulses

Brief magnetic fields used in various technologies and medical treatments, such as Transcranial Magnetic Stimulation (TMS).

Wernicke's Aphasia

A language disorder caused by damage to the temporal lobe affecting comprehension and fluent speech.

Broca's Aphasia

A neurological condition characterized by difficulties in speech production, often resulting from damage to Broca's area in the frontal lobe of the brain.