In some U.K. IPOs any investor may be able to apply to buy shares. Mr. Bean has

Question:

In some U.K. IPOs any investor may be able to apply to buy shares. Mr. Bean has observed that on average these are underpriced by about 9% and for some years has followed a policy of applying for a constant proportion of each issue. He is therefore disappointed and puzzled to find that this policy has not resulted in a profit. Explain to him why this is so.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...