Chapter 1 & Chapter 3

What is the primary agency that deals with the initial public offering of a firm? a. Securities and Exchange Commission (SEC) b. Securities Investor Protection Corporation (SIPC) c. Internal Revenue Service (IRS) d. Special Purpose Acquisition Company (SPAC)

A

Which best describes the purpose of a private placement? a. It is a sale of securities to a private firm for purposes of obtaining cash. b. It is a document that registered the firm with SEC in preparation for IPO. c. It is a document that is filed with the SEC that helps a firm to issue secondary securities. d. It is a pact between investment banks and firms determining the rules by which an IPO is governed.

A

Which is the least risky way that an investment bank can help facilitate the initial sale of common stock to the public? a. A best efforts agreement b. An IPO c. An underwriting d. An originating house

A

The SEC routinely asks that publicly traded companies file what paperwork to keep investors apprised of information that could substantially affect the value of the company? a. Shelf registration b. 10-k c. Direct listing d. Full disclosure

B

The two sides of the Private Equity market are: a. Equities and Debt. b. Venture Capital and Buyouts. c. Public and Private shares. d. Invertible and Convertible shares.

B

What is the initial document that is filed with the SEC that explains the state of the firm that wishes to issue new securities? a. Registration b. Preliminary prospectus c. 10-K filing d. IPO

B

When a firm is looking to "go public" and issue stock that is to be publicly traded for the first time, they generally will initiate this a. by filing all necessary paperwork with the SEC and SIPC. b. through an investment banker. c. in house, using corporate financial analysts to facilitate trades. d. by filing for a syndicate to enroll stocks in the market.

B

Which type of initial public offering is considered to be the most advantageous from the perspective of the issuing firm? a. A best efforts agreement b. An underwriting c. An originating house d. An IPO

B

All of the following speak to the purpose of federal securities laws EXCEPT a. protecting the investing public from price manipulation. b. ensuring a level playing field for all investors. c. protecting against downside risk of investments. d. protecting the investing public from fraud.

C

One advantage of a firm commitment from the perspective of the issuing firm is that the issue firm is guaranteed the sale of a. a portion of the stock at a specific price. b. a portion of the stock but not at a specific price. c. all of the stock at a specific price. d. all of the stock but not at a specific price.

C

The best description of the idea and purpose of a shelf registration is that it is a a. document that outlines tax witholdings brought on by an IPO. b. document that registered the firm with SEC in preparation for IPO. c. document that is filed with the SEC that helps a firm to issue secondary securities. d. pact between investment banks and firms determining the rules by which an IPO is governed.

C

The portion of Private Equity that focuses on helping new companies grow is called: a. Convertible debt. b. Invertible private shares. c. Venture Capital. d. Buyout market.

C

Which of the following is a regulatory body that enforces the federal securities laws? a. Federal Deposit Insurance Corporation (FDIC) b. Securities Investor Protection Corporation (SIPC) c. Securities and Exchange Commission (SEC) d. Internal Revenue Service (IRS)

C

A firm must raise capital to build factories and purchase equipment to develop their products to sell. Which of the following is NOT one of the main sources of capital? a. Bank loans b. Bonds c. Common equity d. Inventory e. Preferred stock

D

All of the following legislations were put into place to protect the investor EXCEPT the a. Dodd-Frank Act. b. Sarbanes-Oxley Act. c. Glass-Steagall Act. d. Gramm-Leach-Bliley Act.

D