Series 79 practice questionmediumIPO Process
Which factor is most likely to influence the allocation of IPO shares to institutional investors during the pricing process?
- AThe investors’ geographic location
- BThe size and quality of their indications of interest✓ Correct answer
- CHow recently the investor became a client
- DThe investor’s political connections
Explanation
Why B — The size and quality of their indications of interest
Allocations are influenced by the strength and reliability of investor demand. Geography and political connections are not legitimate allocation criteria, and new client status is generally not a primary factor.
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