What profit do you actually expect

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Reference no: EM132068832

The Taipei Co. and the Tainan Co. have both announced IPOs at $40 per share. One of these is undervalued by $9, and the other is overvalued by $4, but you have no way of knowing which is which. You plan on buying 1,000 shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled.

If you could get 1,000 shares in Taipei and 1,000 shares in Tainan, what would your profit be? (Do not round intermediate calculations.)

Profit $

What profit do you actually expect? (Do not round intermediate calculations.)

Expected profit $

Reference no: EM132068832

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