Chapter 9
All of the following persons are defined as restricted persons under the new issue rule, EXCEPT: a. A portfolio manager employed by an insurance company b. A registered representative employed by a general securities firm c. A registered representative employed by a broker-dealer that only transacts business in mutual funds d. The parents that reside in the same household as a registered representative employed by a member firm.
C.
An accredited investor is all of the following EXCEPT: a. A registered representative who works for a hedge fund b. An individual with a net worth of $1 million or a gross income of $200,000 for each of the past two years with the anticipated continuation of this income c. A private business development company D. A financial institution
a.
An initial public offering is a. A corporation's first distribution of stock to the public. b. Public assistance to a corporation c. Additional securities issued by a corporation d. None of the above
a.
For securities that will be listed on a national exchange or quoted on Nasdaq, the final prospectus must be distributed to any purchaser for how many days from the effective date? a. 25 b. 40 c. 90 d. 60
a.
Oldline Engineers is a publicly traded company. The registration requirements of Rule 145 might apply in all of the following actions by Oldline EXCEPT: a. Oldline engineers a 1-for-10 reverse stock split of its common stock b. Oldline exchanges one share of Class A voting stock for each two shares of Class B nonvoting stock c. Oldline acquires Smallfry Corporation by issuing one share of Oldline common in exchange for every 10 shares of Smallfry common d. Oldline obtains substantially all the assets of Bygone Company by issuing 1,000,000 shares of Oldline convertible preferred
a.
The following methods of distributing securities are all types of underwritings EXCEPT a(n): a. Stabilization b. Firm-commitment c. Best-efforts d. All-or-none
a.
The red herring is a(n): a. Preliminary prospectus b. Final prospectus c. Viewing statement d. Indication of interest
a.
Under the new issue rule, employees of a broker-dealer are restricted from purchasing which of the following offerings? a. All initial public offerings of equities b. All IPOs and secondary offerings of equities c. All equity and debt new issues d. All equity, debt, and investment company new issues
a.
Which of the following types of account is permitted to purchase an initial public offering of equity securities? a. An account in which 8% of owners are managing directors of a member firm. b. An account in which 12% of owners are portfolio managers c. A minor's account set up for the son of an employee of a member firm d. An account for a broker-dealer that only transacts business in mutual funds.
a.
Persons that serve as the conduit for bringing the issuer and potential buyers together are. a. Financial advisors b. Financial planners c. Specialists d. Investment bankers
d.
Rule 144A provides exemptions for the sale of restricted stock between: a. Nonaccredited investors who regularly purchase restricted stock b. Any financial institutions that can afford to participate in the offering c. Accredited investors d. Qualified institutions that have at least $100 million invested in securities of issuers not affiliated with the issuer
d.
The lack of investor interest in an IPO may cause the managing underwriter of the issue to place a: a. Recall of the securities b. Halt in trading c. Stabilization bid d. Stabilization offer
c. Stabilization bid
Broker-dealers that assist in the distribution of new securities and have no financial liability are: a. Selling partners b. Selling groups c. Selling dealers d. Selling underwriters
b.
Which of the following statements is true concerning the de minimis exemption under the new issue rule? a. Restricted persons may own no more than 5% of the account b. restricted persons may not own more than 10% of the account c. Restricted persons may not own more than 15% of the account d. Restricted persons are not permitted to purchase equity IPOs under any conditions
b.
A Regulation D offering is exempt from registration because securities are offered through a(n): a. Public auction b. Private placement c. Issuer underwriting d. Syndicate
b. Private placement
After the registration is received by the SEC, the following time is called the: a. Blue period b. Hot period c. Cooling-off period d. Passing period
c.
Blue-skying an issue refers to the: a. Sale of securities in other states. b. Issuance of securities in different states c. Registration of the security in states where it will be sold d. Legal status of the issuer
c.
The Green Shoe Clause allows: a. Underwriters to buy stock for their personal accounts b. Selling group members to buy stock for their personal accounts c. Underwriters to buy stock for resale to customers who could not be accommodated d. Selling group members to buy stock for resale to customers of other firms.
c.
Which of the following rules exempts securities sold within the borders of one state from registration requirements? a. Rule 149 b. Rule 145 c. Rule 147 d. Rule 144
c.
