How long is the "lock-up" period that is commonly found in an IPO underwriting contract?
A)one month
B)three months
C)six months
D)one year
E)eighteen months

Question

Quizplus · Accepted Answer

The lock-up period typically lasts for six months after the IPO, during which time insiders such as company executives and early investors are prohibited from selling their shares. This helps to prevent a flood of sell orders in the market immediately after the IPO, which could cause the stock price to plummet.

How Long Is the "Lock-Up" Period That Is Commonly Found