Problem

In some U.K. IPOs any investor may be able to apply to buy shares. Mr. Bean has observed t...

In some U.K. IPOs any investor may be able to apply to buy shares. Mr. Bean has observed that on average these stocks are underpriced by about 9% and for some years has followed a policy of applying for a constant proportion of each issue. He is therefore disappointed and puzzled to find that this policy has not resulted in a profit. Explain to him why this is so.

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Solutions For Problems in Chapter 15