Which One of These Is a Finding of Ritter's Study

question 29

Multiple Choice

Which one of these is a finding of Ritter's study of initial public offerings (IPOs) ?

• A)Firms with either IPOs or SEPs tend to outperform their control groups for the 5-year period following the issue of the new securities.
• B)IPOs are generally incorrectly priced at issuance because over the next five years the IPO firm's abnormal returns exceeded 6 percent on average.
• C)The annual returns for IPO firms during the 5-year period following an IPO are about two percent lower than their control group.
• D)Comparable IPO and non-IPO firms had similar returns for the 5-year period following an IPO.
• E)IPO firms tend to lose 10 percent or more of their market value in the two years following their IPO.

---

Definitions:

Physical Location

The specific geographic or spatial position of an object, person, or event.

Flash Mob

A large group of people who assemble suddenly in a public place, perform an unusual act for a brief time, then quickly disperse.

Psychogenic Illnesses

Disorders that have a psychological origin or cause rather than a physiological one, often linked to emotional and mental stressors.

Rumors

Information or stories circulated without confirmation, often embodying collective concerns or serving to manipulate public opinion.