Which one of these is a finding of Ritter's study of initial public offerings (IPOs)?
A)Firms with either IPOs or SEPs tend to outperform their control groups for the 5-year period following the issue of the new securities.
B)IPOs are generally incorrectly priced at issuance because over the next five years the IPO firm's abnormal returns exceeded 6 percent on average.
C)The annual returns for IPO firms during the 5-year period following an IPO are about two percent lower than their control group.
D)Comparable IPO and non-IPO firms had similar returns for the 5-year period following an IPO.
E)IPO firms tend to lose 10 percent or more of their market value in the two years following their IPO.

Question

Quizplus · Accepted Answer

Ritter's study found that IPO firms tend to underperform compared to their control groups, with annual returns about two percent lower over the five years following the IPO.

Which One of These Is a Finding of Ritter's Study