According to Loughran and Ritter,initial public offerings tend to exhibit __________ performance initially,and __________ performance over the long term.

Question

Quizplus · Accepted Answer

Loughran and Ritter found that IPOs tend to exhibit good performance initially, but poor performance over the long term. This is often referred to as the "IPO effect," where investors tend to overvalue companies during their IPO, leading to a drop in price over time. Therefore, the correct answer is D (good; bad).

According to Loughran and Ritter,initial Public Offerings Tend to Exhibit