Which of the Following Statements Is FALSE

question 12

Multiple Choice

Which of the following statements is FALSE?

• A) Underwriters appear to use the information they acquire during the book-building stage to intentionally underprice the IPO, thereby reducing their exposure to losses.
• B) The green shoe option restricts an underwriter to issue more stock at the IPO offer price.
• C) The lead underwriter usually makes a market in the stock by matching buyers and sellers and assigns an analyst to cover it.
• D) In most cases, the existing shareholders are subject to a 180-day lockup; they cannot sell their shares for 180 days after the IPO. Once the lockup period expires, they are free to sell their shares.

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Definitions:

Price Revenue Relationship

The correlation between the price of a product or service and the revenue generated from its sale.

Sales Volume

The total quantity of goods or services sold by a company within a specific period.

Supply Chain Management

The oversight and management of the flow of goods and services from the point of origin to the point of consumption.

Competitive Advantage

A situation or factor that gives a business an advantage or superior standing over its rivals in the industry.