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You have an arrangement with your broker to request 1,000 shares of all available IPOs....

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Finance

You have an arrangement with your broker to request 1,000 shares of all available IPOs. Suppose that 10% of the time, the IPO is very successful and appreciates by 80% on the first day, 70% of the time it is successful and appreciates by 20%, and 20% of the time it fails and falls by 30%. Assume the average IPO price is $15. 1. If you could get 1,000 shares in each IPOs, what would your expected one-day return on your IPO investments? A) 12% B) 13% C) 14% D) 15% E) 16%

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