Redemption 4

Question 1

In a ______ commitment, any losses incurred are divided proportionately among the underwriter’s ______ according to the terms in the _______

Answer 1

Firm, syndicate members, agreement amongst underwriters

Question 2

Member firms cannot sell common stock ____ to restricted persons

Answer 2

IPO’s

Question 3

When it comes to prospectus’ and registration statements, the SEC requires full disclosure regarding a new issue but does not ______ or ______ of the issue

Answer 3

Approve or disapprove

Question 4

Unlike corporate bonds, municipal bond investors can place orders for a new issue before it’s been awarded to the syndicate. The takedown on presale orders are _____ among the syndicate members

Answer 4

Split

Question 5

A due diligence meeting by occurs between the ______ and ______ to review the full details of the pending underwriting and final terms to be included in the contract

Answer 5

Issuing corporation, Underwriters

Question 6

The largest portion of the spread is the _______

Answer 6

Concession

Question 7

The official notice of sale indicated that the offering will be made on a _____ basis

Answer 7

Competitive

Question 8

Official notices of sale in sue the size of the offering, maturity dates, and the _____, _____, and _____ of the sale

Answer 8

Date, time, place

Question 9

Underwriting syndicate nerves can enlist help from finra member firms. When they do so, these members are known as ______

Answer 9

Selling group members

Question 10

Selling group members have no ____ commitment but underwriter’s do

Answer 10

Capital

Question 11

True or False: Under compliance with rule 144, a control person may sell the greater of 1% of the outstanding shares OR the average of the last four weeks trading volume

Answer 11

True

Question 12

For underwriting, competitive bids must be submitted as a _______

Answer 12

Firm commitment

Question 13

1933 is the ____ market and 1934 is the ______ market

Answer 13

Primary, secondary

Question 14

Private placements can be advertised but only to _______

Answer 14

Accredited investors

Question 15

In a muni underwriting, the order period is the time in which the syndicate manager ____ and _____ orders without considering time of submission

Answer 15

Accepts, allocates

Question 16

A FINAL Prospectus complies with the ______ and _____ disclosure requirements of the SEC act of 1933

Answer 16

Full, fair

Question 17

When an issuer takes into consideration the timing of interest payments when evaluating bids. The issuer will be using the ________ method

Answer 17

True Interest Cost

Question 18

Affiliated persons are typically in control relationships and own ____% of the stock

Answer 18

10

Question 19

When it comes to IPO’s an investment adviser must obtain a ______ that the purchaser is not a restricted person

Answer 19

Representation

Question 20

The spread has 3 components- the ______ fee, _______ fee, and the ______

Answer 20

Managers, underwriters, concession

Question 21

Terms of muni GO and Revenue bonds can be set by the issuer as either ______ or _______ underwriting’s

Answer 21

Competitive, Negotiated

Question 22

The ____ is the only ad allowed for a new issue during the cooling off period. It does not allow solicitation

Answer 22

Tombstone ad,

Question 23

An offering of a maturity less than ____ months excludes a bond from being covered by the Trust Indenture Act of 1939

Answer 23

9

Question 24

When an underwriter believes they can sell more shares than available, and is allowed to short sell on an IPO, this is known as the _____ clause

Answer 24

Green shoe/over allotment

Question 25

When offering a private placement _____ can be solicited, but only _____ can be advertised to

Answer 25

Anyone, accredited investors

Question 26

A bond dealer that quotes a concession of “half” to another dealer means $5 per ______ of par

Answer 26

$1,000

Question 27

When directing sales of a new issue, officers of the managing underwriter are considered to be ______

Answer 27

Restricted

Question 28

Proceeds from the primary offering tend to go to the _____ and the issuer receives _____ in a secondary offering

Answer 28

Issuer, none

Question 29

The holding of a ______, a market out clause, and a _____ clause can be found in the underwriting of a new corporate bond issue

Answer 29

Due diligence meeting, stabilization

Question 30

Member firms and employees cannot partake in _____

Answer 30

IPO’s

Question 31

When a syndicate is formed, it is the responsibility of the ____ to negotiate with the issuer and keep the syndicate records of the underwriting

Answer 31

Syndicate manager

Question 32

Exempt and nonexempt securities for Trust Indenture Act of 1939 typically match that of the

Answer 32

SEC Act of 1933

Question 33

Short swing profits are when an affiliate of a public company realizes a profit on a sale of the company’s stock within _____ months of the purchase, and they have to return it back to the company

Answer 33

6 months

Question 34

Anti fraud positions are applicable for all securities, but not ______ (wheat, oil)

Answer 34

Commodities

Question 35

Good faith deposits are typically between ___ to ___% of the total part value of the bonds offered, and if the bid is unsuccessful, it is ______ to the underwriting syndicate

Answer 35

1-2, returned

Question 36

Underwriting bids typically include the _______ amount and ____ rate

Answer 36

Dollar amount, coupon rate

Question 37

How often can an issuer issue shares in a primary offering

Answer 37

Unlimited

Question 38

True or False: To determine a winning bid on a net interest cost, you would subtract any premium from total interest cost, and you’d also add any discount to total interest cost

Answer 38

True

Question 39

The Trust Indenture Act of 1939 protects investors in corporate bonds should the issuing company default. It also regulates ______

Answer 39

Debt securities

Question 40

In a competitive bid, the winner is the that provides the ______ net interest cost

Answer 40

Lowest

Question 41

A tombstone ad can be placed ___ or ____ the effective date

Answer 41

On, after

Question 42

Normal scale of prices include low yields on _____ term maturities and higher yields on ____ maturities

Answer 42

Shorter, Longer

Question 43

When a corporation has an IPO, the sales being offered are ______ shares

Answer 43

Authorized

Question 44

Preliminary prospectus is used _____ a registration has been filed but _____ it is effective

Answer 44

after, Before

Question 45

The ____ in a muni underwriting is used to determine the bid on a new issue and as a list of the yield or prices at which the bonds will be offered to the public

Answer 45

Scale

Question 46

If an investor wants more info than what is in a prospectus and requested a SAI (statement of additional information), the fund must send it within ____ days

Answer 46

3

Question 47

Within a firm commitment, the ____ details the responsibilities and liabilities of each firm

Answer 47

Agreement amongst underwriters

Question 48

When a syndicate manatee makes the sale of a new issue of bonds, the manager earns the ____

Answer 48

Spread

Question 49

In an all or none offering, the underwriter agrees to devote its _____ to sell the issue

Answer 49

best efforts

Question 50

When determining if an underwriting is fair and reasonable, factors include size of the offering, type of underwriting commitment, type of ______, and the form of _____, value of the form of compensation, underwriter’s relationship with the issuer, or other potential forms of conflict

Answer 50

Commitment, compensation

Question 51

Negotiated muni underwritings can be performed on a firm commitment, ______, or _____ basis

Answer 51

Best efforts, all or none

Question 52

A prospectus typically includes an _______ and stated _____ rate

Answer 52

Effective date, dividend

Question 53

A tombstone add includes the names of the _______, the ___, and the ____

Answer 53

Syndicate members, number of shares to be sold, POP

Question 54

Non-members of the syndicate assisting in the sale of its bond buys them at a discount called the ______

Answer 54

Concession

Question 55

Undivided liability in an eastern account means bent liable for _____% of unsold bonds

Answer 55

10

Question 56

For a new issue muni syndicate account, settlement of the account must occur within ___ days after the issuer delivers the securities to the syndicate

Answer 56

30

Question 57

In a western syndicate, you are not responsible for other member’s _____ that are left over

Answer 57

Shares

Question 58

For Form 144, ____ shares or fewer are sold and the dollar amount is $______ or less

Answer 58

5,000, $50,000

Question 59

You are considered an affiliate if you and your spouse own a total of more than ___% of common stock shares

Answer 59

10

Question 60

If you hold back shares to sell later on, this is known as a ____ offering

Answer 60

Shelf

Question 61

Rule 144A regulates the sale of ____ stock to ______ investors known as ____

Answer 61

Restricted, institutional, QIBS

Question 62

US government bonds are exempt from the _____ of 1939

Answer 62

Trust Indenture Act of 1939

Question 63

It’s ____, not _____ that makes someone an insider

Answer 63

Equity, debt

Question 64

Control stock has a ____ month holding period

Answer 64

6

Question 65

New shares are part of a ______ distribution, and when it’s a first time, this is an _____

Answer 65

Primary, IPO

Question 66

Mini max is the least amount that an issuer needs to _____, and the max amount they are willing to ____. This is done in a ____ underwriting

Answer 66

Raise, Sell, best efforts

Question 67

For an intrastate exemption under Rule 147, the percentage of an issuer’s gross business revenues that must be derived from sales within a company’s home state is _____%

Answer 67

80

Question 68

The SEC’s no approval clause appears on the _____ of the prospectus

Answer 68

Cover

Question 69

______ underwriting involves appointing an underwriting group

Answer 69

Negotiated

Question 70

Underwriting of most corporate issues is done on a _______ basis

Answer 70

Negotiated

Question 71

Reg D is associated with a maximum of 35 ________ investors

Answer 71

Non-accredited

Question 72

Lettered stock is stock that was acquired in a _______

Answer 72

Private placement