Which of the following have been offered as explanations of IPO underpricing?

1. I. Underpricing helps offset the "winner's curse."
2. II. Underpricing helps ensure investors will be long-term holders of the IPO securities.
3. III. Underpricing helps ensure investment bank customers will earn a profit on average.
4. IV. Underpricing is needed to convince investors to accept the risks associated with IPOs.

Multiple Choice

• I, II, III, and IV only
• II and III only
• II only
• IV only
• I, III, and IV only