Results of initial public offering (IPOs) studies tend to support the semi-strong EMH because it appears that prices adjusted rapidly after initial underpricing.

Question

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Studies have found that the prices of IPOs tend to adjust rapidly after the initial underpricing, which supports the semi-strong form of the efficient market hypothesis (EMH). This suggests that market participants have access to and quickly incorporate all publicly available information, including information related to IPO underpricing.

Results of Initial Public Offering (IPOs) Studies Tend to Support