The Offering Price Is Set to Make the Issue Attractive

question 32

Multiple Choice

The offering price is set to make the issue attractive to the market and provide a good price to the issuer.Which of the following is/are true?

• A)Empirical studies by Ritter have shown that the average firm commitments have had a 17.8% underpricing on the first day of trading.
• B)Empirical studies have shown that the best efforts sales have underpricing on the first day of trading.
• C)Some issues such as Shiva which rose dramatically on the first day of trading were viewed as successfully priced by the underwriter because it helped build a long-term investment base.
• D)All of the above.
• E)None of the above.

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Definitions:

Trochlear Nerve

The fourth cranial nerve responsible for the movement of the eyeball, particularly in controlling the superior oblique muscle.

Sensory Nerve

Nerves that transmit sensory information from the body's periphery towards the central nervous system, enabling sensations like touch, pain, and temperature.

Olfactory

Relating to the sense of smell.

Hypoglossal Nerve

The twelfth cranial nerve, responsible for motor control of the tongue.