I need the correct answers for requirement 1 and 2. My answers as shown for prof

Question

I need the correct answers for requirement 1 and 2. My answers as shown for profit = $262.5 and expected profit of $5250 are wrong  

I need the correct answers please. Do not round intermediate calculations when working this problem

The Watson Co and the Mcllroy Co. have both announced IPOs at $41 per share. One of these is undervalued by $9 50. and the other is overvalued by $4 50. but you have no way of knowing which is which You plan on buying 1.050 shares or each issue If an issue is underpriced, it will be rationed, and only half your order will be filled (Enter your answer as directed, but do not round intermediate calculations.) Assuming you could get 1.050 shares in Watson and 1.050 shares m Mcllroy. what would your profit be? Profit $ 2625 What profit do you actually expect? Expected profit $ 5250 What principle have you illustrated? Winner's curse

Explanation / Answer

Underpricing

The pricing of an IPO issue below its market value called underpriced issue. Generally this is done to encourage the investor. As they get things cheaper compare to market rate they will buy it.

Requirement 2

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