Based on simulation, we research the return and risk of purchasing new issues in Chinese primary market. The major conclusions of the paper are listed below: (1) an investor can make more profit if he sells a new issue at closing price rather than opening price on its first trading day; (2) purchasing a new issue in the primary market can get no-risk return in general; (3) we get the fact that the rate of successfully purchasing a new issue in the primary market plays more important role in return than percentage increase on first trading day by sensitivity analysis.
['Weiya Zhao', 'Xiutian Zheng']
Return Forecasting and Risk Analysis of Purchasing New Issues in Chinese Primary Market Based on Simulation