Debt to capitalization ratio use _____________ correct answers book value, including of equity
Green shoe clause correct answers agreement allowing the underwriters to sell additional shares if demand is high for an offering of securities;
can be in part or in full
at any price
can allow un...
FINRA Series 79 Exam || Already Passed.
Debt to capitalization ratio use _____________ correct answers book value, including of equity
Green shoe clause correct answers agreement allowing the underwriters to sell additional shares
if demand is high for an offering of securities;
can be in part or in full
at any price
can allow underwriter to profit
-doesn't need to be approved by underwriter once its disclosed in the prospectus
A company that is not a commercial bank issues a 10-year bond. It is exempt from SEC
registration, regardless how sold. The issuer must be what type of organization? correct answers
non-profit
Frederick is the CEO of a public company that trades on the OTC Bulletin Board, and he owns
20,000 shares of stock in the company. He has asked you to calculate how many shares he can
sell during the next three months. What data do you need to give him an answer? correct answers
-total number of shares outstanding
A limit is imposed on the number of control shares an affiliate may sell during any three-month
period. The sale can't exceed the greater of 1% of outstanding shares in the same class or the
average reported weekly trading volume during the four weeks preceding the sale. However,
trading volume is not considered for securities that trade on the OTC Bulletin Board or through
OTC Pink.
Only __________ are permitted to use free writing prospectuses during the pre-registration
period. In the cooling off period (______________________) FWPs may be used by _________,
_________, __________, and _________________ issuers. ______________ may never use
FWP's. correct answers 1.) WKSI's
2.) After the registration is filed
3.) WKSI's, seasoned, unseasoned, nonreporting
4.) Ineligible
Limited partnership interests are typically regulated as _______________ correct answers
securities, under federal and state laws
The Securities Exchange Act of 1934 defines insiders as correct answers officers, directors, and
owners of more than 10% of the outstanding stock of a corporation
A syndicate is distributing securities of Worldwide Telecom Inc., a company with an average
daily trading volume (ADTV) of $9 million and a public float of $60 million. For an underwriter,
when does the Regulation M restricted period begin and end? correct answers begins: day before
pricing the offering;
,ends: when the distribution is complete
ABC Securities is participating in an underwriting for Bright Leaf, Inc., a public company. ABC
also serves as a market maker for Bright Leaf and owns a block of its stock. Does it have a
conflict of interest? correct answers Only if it owns at least 10% of the outstanding common
stock
Are crowdfunding issuers required to update any material changes in the information contained
in their Form C disclosures filed with the SEC? If so, when? correct answers Yes, at least twice
over the course of an offering
1.) Within five business days of reaching 50% of the company's target raise
2.) within five business days of reaching 100% of the company's target raise
FINRA Rule 5150 correct answers Fairness Opinions
When rendering fairness opinion, firm must disclose:
-contingent fees
-material relationship for compensation within past 2 years with any party involved in the
transaction
-independent verification for information that the opinion is reliant on
-use of fairness committee
-insider compensation (fairness of compensation to any insider of the client company relative to
compensation to public shareholders or employees
An investment banking firm is receiving a fee of $25,000 for writing a fairness opinion and
providing other advice pertaining to an M&A transaction. In which case must the amount of the
fee be disclosed? correct answers In no case
The ratio of current assets to current liabilities is most commonly known as the correct answers
current ratio
Price to Book Value Calculation correct answers (stock price x outstanding shares) /
(shareholders equity - goodwill)
Rule 139 exclusion is available for correct answers The Rule 139 exclusion is available only for
research coverage that is ongoing and does not represent a broker dealer's initial coverage on the
issuer or its securities.
two main exemptions that an underwriter may claim as defense against a civil suit alleging an
untrue statement in a registration correct answers -"reasonable investigation and grounds for
belief"
-"lack of knowledge"
Which of the following categories of filers must file their Form 10-Q within 40 calendar days?
I. Large accelerated filer
II. Non-accelerated filer
, III.Small accelerated filer
IV. Accelerated filer correct answers I and IV
Large accelerated filers ($700 million or greater public float) and accelerated filers ($75 million
or greater public float and less than $700 million) have 40 calendar days from the end of the
fiscal quarter to file a Form 10-Q.
10-Q filing deadlines of large accelerated filers, compared to accelerated filers, and non-
accelerated? correct answers The same for both
The 10-Q filing deadline is 40 days after the end of each fiscal quarter for both large accelerated
filers and accelerated filers. It is 45 days for other (non-accelerated) filers.
Three categories of filers and qualifications correct answers -Large Accelerated ($700mm + non-
affiliate market cap or more)
-Accelerated ($75mm-$699mm)
-Non-Accelerated (<75mm)
Underwriters act in an agency capacity when engaged in which types of underwritings?
I. Firm commitment
II. Mini-max
III.Best efforts
IV. Standby correct answers II and III.
Underwriters are acting in an agent capacity when the issuer has the risk of the offering
Zenith Securities is an underwriter in an IPO. The underwriting agreement specifies that Zenith
will be paid a pre-set amount of deal revenue, based on its allocation of shares, regardless of the
number of shares Zenith is actually able to distribute. What type of underwriting is this? correct
answers fixed economics
If taxable income is greater than book income, a ___________ is generated correct answers
deferred tax asset
Levered Beta Calculation correct answers BL= BU x (1+(1-T)*(D/E))
The spread between the nominal yield and current yield is roughly equal to correct answers the
spread between the CY and YTM
If a bond is trading at a premium, rank of yield correct answers NCYYc
-Nominal
-Current
-YTM
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