Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Having heard about IPO underpricing, I put in an order to my broker for 1,170 shares of every IPO he can get for me.
Having heard about IPO underpricing, I put in an order to my broker for 1,170 shares of every IPO he can get for me. After 3 months, my Investment record is as follows: Shares Allocated IPO A to Me Price per Share Initial Return B C 670 370 1,170 $ 10 8% 22 15 D e 8 11 2 20 a. What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Average underpricing $ 10.25 b. What is the average Initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating this average initial return, remember to weight by the amount of money Invested in each Issue. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) Average initial return 41.0 %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started