Average underpricing of the sample of ipos

Question: Having heard about IPO underpricing, I put in an order to my broker for 1,000 shares of every IPO he can get me. After 3 months, my investment record is as follows:

IPO              Shares         Price per
return    Allocated to Me      Share    Initial
A                   500                \$10        7%
B                   200                  20        12%
C                1,000                   8        -2%

Q1. What is the average underpricing of this sample of IPOs?

Q2. What is the average initial return on my "portfolio" of shares purchased from the four IPOs I bid on? Calculate the average initial return weighting by the amount of money invested in each issue.

Q3. Why have I performed so poorly relative to the average initial return on the full sample of IPOs? What lessons do you draw from my experience?

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##### Reference No:- TGS02054629

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