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An Individual Investor with a Small Portfolio Who Wishes to Purchase

Question 42

Multiple Choice

An individual investor with a small portfolio who wishes to purchase 100 shares of each IPO is more likely to receive an allocation of shares when:


A) an IPO is substantially oversubscribed than when it is not.
B) the knowledgeable investors feel the issue is underpriced.
C) an IPO is severely underpriced.
D) an IPO is undersubscribed.
E) he or she has a standing order with the underwriter to purchase shares in every IPO handled by that underwriter.

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