New stock issues are considered a special investment situation, because
A)they exhibit a very good long-term investment potential.
B)the spread is greater than that in the secondary market.
C)there is some evidence that new issues are under-priced.
D)More than one of the above

Question

Quizplus · Accepted Answer

There is a belief in the investment community that securities may be under-priced when they are issued to the public for the first time.

New Stock Issues Are Considered a Special Investment Situation, Because