Multiple choice

Which of the following is the correct meaning of ‘IPO price’ in banking terminology?

  1. A notice sent to a client that it must provide money to satisfy a minimum margin requirement set by an Exchange or by a bank/broking firm

  2. Quotation of the Initial Public Offering company’s shares on the stock exchange for trading

  3. The price of share set before being traded on the stock exchange

  4. The date on which Initial Public Offering stocks are first traded on the stock exchange by the public

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In banking terminology, IPO price refers to the price at which shares are offered to investors before they begin trading on the stock exchange. This is the subscription price determined by the company and lead managers. It is not the margin call notice (A), not the listing date (D), and not simply the quotation for trading commencement (B).

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