An average individual investor who participates in an IPO:

Question

Quizplus · Accepted Answer

The "winner's curse" refers to the phenomenon where individual investors may overestimate the value of shares in an IPO and subsequently pay too much for them. This can lead to financial loss if the shares do not perform as well as expected. Option A is incorrect because undersubscribed shares may not necessarily lead to high returns for individual investors. Option B is incorrect because oversubscribed IPOs may result in a lower allocation of shares for individual investors. Option D is incorrect as the Green Shoe provision is a tool used by underwriters to manage the supply and demand of shares, and does not directly protect individual investors. Option E is a potential risk for individual investors, but not a guarantee.

An Average Individual Investor Who Participates in an IPO