Which of the following describes when a syndicate's offering price is less than the market price immediately following the offering?

Question

Quizplus · Accepted Answer

IPO underpricing occurs when the offering price of a stock is lower than the market price immediately after the offering. This can happen because the underwriters in a syndicate want to ensure a successful IPO and attract more investors. As a result, they price the offering lower than what the market is willing to pay, creating a short-term profit for investors who buy the stock during the IPO.

Which of the Following Describes When a Syndicate's Offering Price