The Offering Price Is Set to Make an Issue Attractive

Multiple Choice

The offering price is set to make an issue attractive to the market and provide a good price to the issuer.Which of the following is/are true?

A) Empirical studies by Ritter have shown that the average firm commitments have had a 17.8% underpricing on the first day of trading.
B) Empirical studies have shown that best efforts sales have underpricing on the first day of trading.
C) Some issues which rose dramatically on the first day of trading were viewed as successfully priced by the underwriter because it helped build a long-term investment base.
D) All of the above.
E) None of the above.