Unit 1 Quiz 2

An offering is defined as the sale of a security. Regarding offerings all of the following are true:

Offering can be identified by who is selling the securities issuer or investor Offerings of stocks can be made to the investing public Offerings of bonds can be made to the investing public

Which of the following best describes how a market order to buy would fill if placed when the market price of the stock was at 40?

The next available price

Your customer purchases 5 JIM 50 calls at 3. Funds must be deposited in the account to pay for the trade no later than

The next business day

Your customer places an order to buy 500 shares of Narcissus, Inc., (the ticker is NCS) at $50 per share fill-or-kill (FOK). When the order is entered, there are 450 shares available at $50 per share. What happens to the order?

The order will be canceled and nothing is done

Which of the following firms would not normally be part of an initial public offering (IPO)?

Third-market dealers

An issuer that is already a publically traded company wants to register new securities without selling any of the shares until later when it anticipates it will be retooling all of its existing manufacturing plants. Which of the following applies?

This can be accompanied by utilizing a shelf registration specifically designed to register shares presently to be sold later

A corporate stock is purchased on Friday, April 2, regular way. When will the trade settle?

Tuesday, April 6

Which of the following is not a characterization of the Securities Act of 1933? A. Prospectus Act B. Truth in Securities Act C. Paper Act D. Exchange Act

d. Exchange Act

Carrying firms may not

mix customer funds and securities with their own

For securities offered via a shelf registration, a supplemental prospectus

must be filed with the SEC before each sale.

In a prime brokerage account, the prime broker

provides custody and clearing services, as well as margin loans.

A registration statement disclosing material information about a new issue must be filed with Securities Exchange Commission. The accuracy and adequacy of the registration statement is the responsibility of

the issuer

Great Plains Investment is a member firm that maintains an inventory in BigBox Stores, Inc., common stock. When transacting business in BigBox stock, the firm is most likely acting in what capacity?

Market Maker

Which of the following is true regarding a member firm operating under Financial Industry Regulatory Authority (FINRA) membership or the membership of another self-regulatory organization (SRO)?

Member firms are required to be full-service broker-dealers.

Indications of interest taken during the cooling-off period are

Nonbinding on the issuer and underwriters and nonbinding on the investor

Which of the following statements with regard to the issuance of securities is true?

The Securities Act of 1933 provides criminal penalties for fraud.

Regarding a shelf registration filed with the Securities and Exchange Commission (SEC), which of the following statements are true?

A supplemental prospectus must be filed before each sale & Portions of a shelf offering can be sold over a three-year period without having to reregister the security

Which of the following choices would best describe a follow-on offering?

An issue of shares by a public company that is already listed on an exchange

Market orders

always get the next available price

When shares are held in street name, this refers to the shares being

held in the name of the broker-dealer for the beneficial order.

The transfer agent for a corporation is responsible for each of the following except A. Canceling old and issuing new certificates B. Maintaining records of ownership C. Acting as an intermediary between the buy and sell sides of a transaction D. ensuring that its securities are issued in the correct owner's name

C. Acting as an intermediary between the buy and sell sides of a transaction

All of the following phrases are associated with a broker-dealer acting as a principal except A. "charges a commission for the transaction" B. "profits on spread" C. "maintains an inventory" D. "trades with customers from own inventory"

"charges a commission for the transaction"

A new registered representative receives a memo discussing the distribution of a red herring. The registered representative knows that the memo is referencing

A preliminary prospectus

All of the following are securities that are exempt from registration except A. ABC Coporation 90-day commercial paper B. BigCity National Bank Holding Company, Inc., common stock C. A five-year Treasury note D. BigCity National Bank Holding Company, Inc. 180-day commercial paper

B. BigCity National Bank Holding Company, Inc., common stock

An underwriter is placing a tombstone advertisement for a company's new issue. A prospective investor might expect to see all of the following information on the advertisement except A. the type of security to be sold (stock or bond) B. the names of the company's officers C. the names of the underwriting members D. the number of shares to be sold

B. the names of the company's officers

Two months ago your customer sold short 200 shares of Seabird Airlines at $15 a share. Today, the stock is trading at $10 a share. In order to close out the position your customer would

Buy 200 shares of Seabird

Your client, Randall Stephens, has been bearish on LMN stock and sold it short several months ago. He now believes the company is in a good position for a turnaround and wants to change his strategy on LMN. What should he do to implement his new strategy?

Buy to close his existing position and open a new long position in the stock

Raising funds is generally accomplished by corporations through the issuance of stock (equity) or bonds (debt). This is done in

The capital market