Ritter\'s study of Initial Public Offerings (IPOs) showed that the post offering

Question

Ritter's study of Initial Public Offerings (IPOs) showed that the post offering stock performance was:

A.

less than the control group by about 2% in the five years following the IPO.

B.

incorrectly priced at issuance because over the next five years the abnormal returns were greater than zero on average.

c

.

E.

All of these.

immaterial to the pricing of the IPO because future market performance is unknown at issuance.

D.

equal across IPOs, irrespective of risk or which year they were issued.

A.

less than the control group by about 2% in the five years following the IPO.

Explanation / Answer

C.    immaterial to the pricing of the IPO because future market performance is unknown at issuance.

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