Which of the following statements about initial public offerings (IPOs)is (are)true?
A)An IPO refers to the initial sale of a firm's stock or bonds.
B)The securities sold through an IPO are typically sold at a fixed price.
C)The securities sold during an IPO tend to be underpriced.
D)both B and C

Question

Quizplus · Accepted Answer

IPOs typically involve the initial sale of a firm's stock or bonds. The securities sold through an IPO are usually sold at a fixed price, and it is common for these securities to be underpriced, potentially leaving money on the table for investors who are able to purchase them at the IPO price and then sell them once they begin trading in the secondary market. An IPO refers to the initial sale of a firm's stock or bonds. The securities sold through an IPO are typically sold at a fixed price. However, the securities sold during an IPO tend to be underpriced, meaning that the offering price is lower than the price at which the shares trade in the secondary market. This is done to attract investors and ensure demand for the new shares.

Which of the Following Statements About Initial Public Offerings (IPOs)is