What Is the Impact of Underpricing a Securities Issue

Multiple Choice

What is the impact of underpricing a securities issue?

A) The underwriter loses while the issuing firm gains.
B) Both the underwriter and the outside investor gains while the issuing firm loses.
C) The outside investor loses while the issuing firm gains.
D) Both the underwriter and the outside investor loses while the issuing firm gains.
E) All three parties lose when the securities are underpriced.