When average investors in an ipo receive their full allocation of new shares because the smart money avoided the issue, they fall victim to ____.

Respuesta :

The correct answer is the winner's curse.

When average investors in an IPO receive their full allocation of new shares because the smart money avoided the issue, they fall victim to the winner's curse.

  • An initial public offering (IPO) is the process of offering shares of a private corporation to the public in a new stock issuance for the first time.
  • The current value estimate of the firms expected cash flows is discounted by its appropriate rate of return.

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