If the offer price of a new issue is too low,
1. demand will exceed supply
2. supply will exceed demand
3. the price of the securities will rise
4. the price of the securities will fall
A)1 and 3
B)1 and 4
C)2 and 3
D)2 and 4

Question

Quizplus · Accepted Answer

When the offer price of a new issue is too low, demand will exceed supply because more investors will want to buy the securities at the attractive price, and the price of the securities will likely rise after the issue due to this high demand.

If the Offer Price of a New Issue Is Too