Use the following statements to answer this question:
I.Spinning encourages underpricing in the market.
II.Spinning is unethical.

Question

Quizplus · Accepted Answer

Spinning, in the context of initial public offerings (IPOs), refers to the practice where investment banks allocate shares from an IPO to corporate executives at other companies in exchange for future business. This can lead to underpricing in the market as it creates an artificial demand for the shares. It is considered unethical because it can lead to conflicts of interest and unfair allocation of shares.

Use the Following Statements to Answer This Question