Unit 1 Quiz 3
A broker-dealer that executes trades and settles transactions for another broker-dealer is called
A carrying firm
Your investor is short 300 shares of Seabird Airlines common stock. In order to close this position the investor would enter which of the following orders?
Buy 300 shares of Seabird Airlines
Which type of underwriting is characterized by the broker-dealer buying the entire issue from the issuer and then reoffering it to the public?
Firm commitment
The preliminary prospectus for the IPO of the Big Shoes Sneaker Company indicates that the number of shares sold may be increased as much as 15% if market demand is sufficient. This is called a
Green shoe offering
Which of the following orders need not be immediately filled in their entirety?
Immediate or cancel (IOC) & Buy stop limit
A customer enters an order to buy 325 shares of Bryce Bridges, Inc., at 17. Which of the following regarding these order instructions is true?
The order can be executed at 17 or lower
BigBox Stores, Inc., common stock is a New York Stock Exchange-listed security. If an over-the-counter dealer makes a market in the stock, this activity is taking place in which market center?
The third market
A private securities transaction
is exempt from registration under the Act of 1933 & Can be sold to individual accredited investors
The primary purpose of the Securities Act of 1933 is to
require full and fair disclosure in connection with the sale of securities to the public.
In a split offering,
shares are issued from the corporation and sold by existing shareholders.
Seacoast Securities is a market maker for JIM common stock. They complete a sale of 300 shares of JIM common to a customer from inventory and charge a modest commission for the transaction. This activity is an example of which of the following?
Acting in both a broker and dealer capacity on the same trade
A central, physical, marketplace where securities are traded through a designated market maker is
An exchange
The preliminary prospectus for an IPO indicates that the number of shares to be sold may be increased as much as 15% if market demand is sufficient. This is called
Green shoe option
A broker-dealer's business model allows for only the purchase and sale of securities for retail customer accounts. It does not execute, settle, or clear its customer's transactions, nor does it tend to any back-office functions such as sending trade confirmations or forwarding proxies. This broker-dealer would best be described as what type of firm?
Introducing/fully disclosed
A final prospectus contains all of the following except A. the use of the proceeds B. SEC approval C. History of the business D. Description of the management
SEC approval
Which of the following is true regarding the primary market?
Issuer transactions occur in the primary market.
An underwriting group is currently assisting an issuer with the preparation and filing of the registration statement for a new issue. Who is responsible for the accuracy of the information within the registration statement?
Issuing corporation
The Sierra Verde Coffee Company files a registration statement with the SEC for the sale of new securities. While reviewing the registration statement, the SEC determines that it has not been filed properly and issues a deficiency letter. Sierra Verde submits a corrected registration statement. Which of the following is true regarding the 20-day cooling-off period?
It is halted on the day the deficiency letter is issued and must begin anew from that same date once the corrected registration is received.
Regular way settlement for the purchase of an equity option occurs
One business day after the trade date
Corporate bonds are most likely to trade in which market center?
Over the counter market
Which of the following would take place in the primary market?
Securities sold to the public by the issuer
Your client, Jane Anderson, has owned QRS for a few years but has now turned bearish on QRS. What transaction would you recommend?
Sell QRS to close
Which of the following best describes how a sell stop at 39 order would be filled?
The next available price after the market price falls to 39
A company is engaging in a securities offering that is a combination of a primary and secondary offering. Which of the following is true?
This combination is known as a split offering where the issuer receives some of the proceeds and existing shareholders receive some of the proceeds from the sale.
Rules regarding restricted persons state that each of the following is considered immediate family except
an aunt or an uncle
Your customer notes that they did not pay a commission on their purchase of ACB preferred stock that they placed through your firm. The firm likely acted in what capacity in this transaction?
Principal
