Concerning a new issue of stock, a lock-up refers to
A)a guaranteed profit on the initial purchase
B)a guaranteed profit to the underwriter
C)the requirement that shares purchased by insiders prior to an initial public offering must retain those shares for a specified period
D)initial buyers of the stock in the IPO must hold the shares for a specified period of time

Question

Quizplus · Accepted Answer

A lock-up period refers to a predetermined amount of time following an initial public offering (IPO) during which insiders and early investors are restricted from selling their shares. This is to prevent the market from being flooded with too much stock too quickly.

Concerning a New Issue of Stock, a Lock-Up Refers to