After a new issue is brought to market it is the marginal investor who determines the price at which the stock will trade.

Question

Quizplus · Accepted Answer

The marginal investor, who is the investor with the highest willingness to buy or sell at a particular price, ultimately determines the price at which the stock will trade. This is due to the market forces of supply and demand, as the marginal investor's actions influence the equilibrium price.

After a New Issue Is Brought to Market It Is