Which of the following is true of an initial public offering (IPO)?
A) Buying an IPO stock is less risky than purchasing established companies in the secondary market.
B) An IPO stock can be sold later in the primary market.
C) An IPO's stock price may rise or fall rapidly on the first day.
D) An IPO represents a company that was just created within the last month.

Question

Quizplus · Accepted Answer

An IPO's stock price can indeed rise or fall rapidly on the first day of trading due to high volatility and investor speculation. This is a common characteristic of IPOs as the market tries to find the right price for the newly listed shares.

Which of the Following Is True of an Initial Public