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If You Were to Purchase the Shares of a Firm

Question 28

Multiple Choice

If you were to purchase the shares of a firm one month after its IPO as well as the shares of a comparable sized (matched) firm on the same day and then hold both shares for five years,you would expect


A) that the return of the IPO firm's stock to be greater than that of the matched firm.
B) that the return of the matched firm's stock to be greater than that of the IPO firm.
C) that the return of the two stocks to be equal.
D) that since the two firms are likely to be uncorrelated the relation cannot be predicted.

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