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Which of the following is a possible exception to the efficient-market theory? 1. The long-run returns of IPOs tend to underperform the market. 2. IPO
Which of the following is a possible exception to the efficient-market theory?
1. The long-run returns of IPOs tend to underperform the market. | |
2. IPO spreads are lower on larger issues. | |
3. Underwriters charge investors more for IPO shares than they pay the issuing firms. | |
4. The issuance of equity is interpreted as an unfavorable signal by investors. |
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