The Woods Company and the Spieth have both announced an initial public offering (IPO) at $40...

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The Woods Company and the Spieth have both announced an initialpublic offering (IPO) at $40 per share. One of these is undervaluedby $9, and the other is overvalued by $4, but you have no way ofknowing which company is undervalued and which company isovervalued. You plan to buy 1,000 shares in Woods and 1,000 sharesin Spieth. If an issue is undervalued, and only half of your shareswill be filled. If you could get 1,000 shares in Woods and 1,000shares in Spieth, what would your profit be? What profit do youactually expect? What principle have you employed?

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The Woods Company and the Spieth have both announced an initialpublic offering (IPO) at $40 per share. One of these is undervaluedby $9, and the other is overvalued by $4, but you have no way ofknowing which company is undervalued and which company isovervalued. You plan to buy 1,000 shares in Woods and 1,000 sharesin Spieth. If an issue is undervalued, and only half of your shareswill be filled. If you could get 1,000 shares in Woods and 1,000shares in Spieth, what would your profit be? What profit do youactually expect? What principle have you employed?