During the IPO process the price of new security depends on many different factors but most important one is IPO firms past years performances. Now if the offer price of new security is lower than perceived market value:

1. Security price will increase

2. Supply will exceed demand

3. Demand will exceed supply

4. Security price will fall

• 1 and 2

• 2 and 3

• 2 and 4

• 3 and 4

• 1 and 3