IPO underpricing is the phenomenon that the IPO issue price is significantly lower than the first day closing price. So the investors can immediately make an extra profit at the first day when IPO come into the market. The significant IPO underpricing is the direct reflection of IPO inefficiency. By using 600 initial public offerings (IPOs) in the period 2012 to 2018 in a nation's stock market, a research found that issue price, indigenous population ownership, and size of underwriters are significant in explaining the variation of IPOs' underpricing. In the conclusion, higher issue price and larger underwriters led to bigger scale of IPO underpricing. The unique characteristic of promoting the indigenous population to participate in the equity market from the government regulatory intervention reduced underpricing. Company size was set as a control variable since large companies are associated with higher discount on their shares to signal their superior future prospects. The research used market atmosphere to moderate the effect of these from the government regulatory intervention reduced underpricing. Company size was set as a control variable since large companies are associated with higher discount on their shares to signal their superior future prospects. The research used market atmosphere to moderate the effect of these factors on IPO underpricing. The market atmosphere showing positive significant correlation to the IPO underpricing rate indicates non-rational activity is severe in this stock market. The first-day turn-over rate was considered as intervening variable. a) Please develop a theoretical framework and draw a diagram. (7 marks) (You may draw it and attach the pic as attachment) b) Develop 3 hypotheses, including one using the Intervening Variable, one using Control Variable, and one using the Moderating Variable. (6 marks) c) What would be the problem statement? (3 marks) IPO underpricing is the phenomenon that the IPO issue price is significantly lower than the first day closing price. So the investors can immediately make an extra profit at the first day when IPO come into the market. The significant IPO underpricing is the direct reflection of IPO inefficiency. By using 600 initial public offerings (IPOs) in the period 2012 to 2018 in a nation's stock market, a research found that issue price, indigenous population ownership, and size of underwriters are significant in explaining the variation of IPOs' underpricing. In the conclusion, higher issue price and larger underwriters led to bigger scale of IPO underpricing. The unique characteristic of promoting the indigenous population to participate in the equity market from the government regulatory intervention reduced underpricing. Company size was set as a control variable since large companies are associated with higher discount on their shares to signal their superior future prospects. The research used market atmosphere to moderate the effect of these from the government regulatory intervention reduced underpricing. Company size was set as a control variable since large companies are associated with higher discount on their shares to signal their superior future prospects. The research used market atmosphere to moderate the effect of these factors on IPO underpricing. The market atmosphere showing positive significant correlation to the IPO underpricing rate indicates non-rational activity is severe in this stock market. The first-day turn-over rate was considered as intervening variable. a) Please develop a theoretical framework and draw a diagram. (7 marks) (You may draw it and attach the pic as attachment) b) Develop 3 hypotheses, including one using the Intervening Variable, one using Control Variable, and one using the Moderating Variable. (6 marks) c) What would be the problem statement