Question
Select all that apply
Which of the following are explanations of underpricing?
Multiple select question.
Underpricing is a kind of insurance for the investment banks.
Underpricing is intentional theft from the issuing corporation.
Underpricing occurs because it primarily benefits the pre-issue shareholders
Underpricing occurs with smaller issues in order to attract investors.
Which of the following are explanations of underpricing?
Multiple select question.
Underpricing is a kind of insurance for the investment banks.
Underpricing is intentional theft from the issuing corporation.
Underpricing occurs because it primarily benefits the pre-issue shareholders
Underpricing occurs with smaller issues in order to attract investors.
Answers
GPT-4o mini
The explanations of underpricing that apply are:
- **Underpricing is a kind of insurance for the investment banks.**
- **Underpricing occurs with smaller issues in order to attract investors.**
While there may be arguments regarding the intentionality of underpricing or its effects on pre-issue shareholders, the first and last options provided are the most commonly accepted explanations within financial markets.
- **Underpricing is a kind of insurance for the investment banks.**
- **Underpricing occurs with smaller issues in order to attract investors.**
While there may be arguments regarding the intentionality of underpricing or its effects on pre-issue shareholders, the first and last options provided are the most commonly accepted explanations within financial markets.