Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

undefined Having heard about IPO underpricing, I put in an order to my broker for 1,010 shares of every IPO he can get for me.

image text in transcribedundefined

Having heard about IPO underpricing, I put in an order to my broker for 1,010 shares of every IPO he can get for me. After 3 months, my investment record is as follows: IPO A B D Shares Allocated to Me 510 210 1,010 0 Price per Share $11 20 9 12 Initial Return 6% 11 - 2 24 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 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 %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Multifractal Financial Markets An Alternative Approach To Asset And Risk Management

Authors: Yasmine Hayek Kobeissi

1st Edition

1461444896, 978-1461444893

More Books

Students also viewed these Finance questions