Trevor wants to purchase 500 shares of every IPO to hit the market. Trevor should expect to:

Question

Quizplus · Accepted Answer

The "winner's curse" refers to the phenomenon where investors who win the bid for an IPO often end up overpaying, especially in hot or oversubscribed markets. This is because the only bids that are accepted are those that are willing to pay the most, which often leads to an overestimation of the true value of the shares.

Trevor Wants to Purchase 500 Shares of Every IPO to Hit