Chapter 11 - Offerings

Question 1

The aftermarket prospectus delivery requirement for non-listed follow-on offerings is ___ days.

Answer 1

40

Question 2

Securities that are exempt from registration (6):

Answer 2

• Government/Municipal Bonds
• Commercial Paper
• Bankers’ Acceptances
• Bank Issues
• Non-Profit Issues
• Small Business Issues

Question 3

Rule 144A exempts sellers from the holding period and volume limitations of Rule 144 if trading is done with a _____.

Answer 3

Qualified Institutional Buyer

Question 4

A statutory preliminary prospectus is also referred to as a _____.

Answer 4

red herring

Question 5

Total Spread =

Answer 5

Manager’s Fee + Underwriter’s Fee + Selling Concession

Question 6

A registered offering of a large block of stock that has been previously issued to the public.

Answer 6

Secondary offering

Question 7

An offering of shares with the proceeds being directed to the issuing corporation.

Answer 7

Primary offering

Question 8

A prospectus must be made available in the secondary market for an exchange-listed IPO for ___ days.

Answer 8

25

Question 9

What type of underwriting is cancelled if a specified portion is not sold?

Answer 9

Mini-max

Question 10

Indication of interest are _____ on both the customer and broker-dealer.

Answer 10

non-binding

Question 11

The first date on which orders for a new issue may be accepted.

Answer 11

The effective date

Question 12

Reg. D exempts _____ from the registration requirements of the Securities Act of 1933.

Answer 12

private placements

Question 13

The difference between what the syndicate pays the issuer for the new issue and the public offering price.

Answer 13

The underwriting spread

Question 14

In addition to providing a prospectus, a _____ advertisement may be published to announce an offering.

Answer 14

tombstone

Question 15

The private placement disclosure document is the:

Answer 15

Offering Memorandum

Question 16

Written communication about an offering that does not meet the requirements of a statutory prospectus.

Answer 16

Free writing prospectus

Question 17

Rules that govern the registration of an issue in any state in which it will be offered.

Answer 17

Blue-Sky Laws

Question 18

Who is expected to apply for a CUISP number on a new municipal bond?

Answer 18

The underwriter(s)

Question 19

What is the difference between a syndicate member and a firm in the selling group?

Answer 19

Syndicate members assume liability, while firms in the selling group do not.

Question 20

Advertises that municipal bonds are available and invites underwriters to bid on a new competitive issue.

Answer 20

Notice of Sale

Question 21

A private sale by an issuer that has previously sold registered securities.

Answer 21

Private Investment in Public Equity (PIPE) offering

Question 22

A security received or purchased by an affiliate of the issuer, such as a director, officer, or major shareholder.

Answer 22

Control security

Question 23

Registration/prospectus requirements of any reclassification of securities BEST describes:

Answer 23

Rule 145 of the Securities Act of 1933

Question 24

XYZ Corporation has conducted a private placement to raise additional funds after IPO. This activity is referred to as a:

Answer 24

PIPE offering

Question 25

A firm is the managing underwriter of a follow-on offering of a security that is listed on the NYSE. The prospectus delivery rule:

Answer 25

Does not require the firm to deliver a prospectus

Question 26

A customer has filed the required forms in order to sell securities under Rule 144. If some of the securities were not sold within the required time frame and the customer wants to sell the remaining shares, what must happen?

Answer 26

A new form must be filed and the unsold shares may be sold within 90 days.

Question 27

DCH, Inc., an investment banker, has entered into a firm-commitment underwriting with ABC Company to sell 10,000,000 shares of stock. What are the requirements of this arrangement for the investment banker?

Answer 27

Sell the entire issue or retain any share left unsold.