Which One of the Following Statements Concerning IPOs and Underpricing

question 14

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)The more an issue is underpriced,the more it tends to be oversubscribed.
• C)IPO underpricing is a function of the underwriting fee.
• D)Underpricing tends to discourage investors from participating in the IPO market.
• E)Undersubscribed shares generally tend also to be underpriced shares.

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Definitions:

Long Axis

Refers to the longest dimension or length of an object or organ, often used in medical imaging to describe orientation.

Transverse

Positioned or extending across something, typically right angles to something else, or lying across the body or a body part.

Superior

An anatomical term indicating a structure situated above or directed upward, often in relation to another body part.

Cephalic

Relating to, or located on or near the head.