1.Which of the following statements about IPOs is TRUE? A....
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1.Which of the following statements about IPOs is TRUE?
| A. | The fees paid by a company to underwriters are generally very sensitive to the size of the offering. | |
| B. | An auction is not the most common method companies rely upon to sell shares. | |
| C. | On average, the closing market price on the first day of trading of an IPO share is lower than the offer price (i.e. IPO price). | |
| D. | Venture capitalists and other private equity firms rarely use IPOs to sell their shares in a private company. |
2.
At expiry, a call option is always worth:
| A. | the maximum of the share price minus the exercise price, and zero. | |
| B. | at least the exercise price. | |
| C. | the difference between the share price and the price paid for the option. | |
| D. | None of the provided answer choices. |
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