Having heard about IPO under pricing, I put in an order to my broker for 1,000 shares
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Having heard about IPO under pricing, I put in an order to my broker for 1,000 shares of every IPO he can get for me. After 3 months, my investment record is as follows:
a. What is the average under pricing of this sample of IPOs?
b. What is the average initial return on my "portfolio" of shares purchased from the four IPOs I bid on? Calculate this average initial return, weighting by the amount of money invested in each issue.
c. "You have just encountered the problem of the winners' curse." True or false?
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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