Series 79 Diagnostic Key Diagnostic Questions || A+ Graded Already.
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Module
Series 79 D
Institution
Series 79 D
What priority of the debtor's assets does an attorney representing a company in bankruptcy have? correct answers Fees for bankruptcy attorneys have a claim after secured creditors but before recent employee wages.
Company A and Company B have similar P/E ratios. Company A is expected to grow ear...
Series 79 Diagnostic Key Diagnostic Questions || A+ Graded
Already.
What priority of the debtor's assets does an attorney representing a company in bankruptcy have?
correct answers Fees for bankruptcy attorneys have a claim after secured creditors but before
recent employee wages.
Company A and Company B have similar P/E ratios. Company A is expected to grow earnings at
a 20% annual rate in the future, while Company B is expected to grow earnings at a 10% annual
rate. What is the relationship between the two companies' PEG ratios? correct answers the higher
the expected growth rate, the lower the PEG ratio -- so B has a lower PEG than A
Nonagricultural employment is what kind of economic indicator? correct answers coincident
indicator
details regarding the audit committee of a public company : correct answers Sarbanes-Oxley and
Regulation S-K require all members of a company's audit committee be independent members of
the board (i.e. not employees of the firm or related to employees of the firm). Also, Nasdaq and
NYSE companies are required to have a financial expert on the audit committee.
Company P issues a bond paying 7% cash interest and 5% PIK interest. An investor owning this
bond would pay taxes correct answers each year on both the cash interest and PIK interest as
ordinary income.
A commitment whereby the underwriter agrees to purchase any portion of an issue offered to
existing shareholders under a rights offerings that is left unsubscribed correct answers stand-by
commitment
A broker dealer learns that one of its employees has been using insider information on a
recurring basis. What is the best way that the firm can protect itself from liability? correct
answers broker dealers are required to implement appropriate supervisory procedures, conduct
annual compliance reviews, and have information barriers in place to prevent the flow of
sensitive information between departments. If the firm can prove that it followed protocol, it
would not necessarily be held liable for insider trading by an employee.
A preliminary prospectus must be delivered to a potential purchaser no later than correct answers
at least 48 hours prior to the confirmation of sale.
Return on Assets correct answers Net Income / Average Assets
Return on Equity correct answers Net Income / Average shareholders equity
In a competitive sale underwriters compete for underwriting correct answers municipal bonds
, Which assets would be LEAST likely to be structured into an asset-backed security? correct
answers Corporate equipment
Under discounted cash flow (DCF) analysis, what type of company often includes a size
premium in determining the weighted average cost of capital (WACC)? correct answers smaller
companies
After an arbitration proceeding has been completed, a decision is to be rendered by the
arbitrators within correct answers 30 days
Jane, discovers during due diligence that the company does business with the Cuban
government. After consulting with her manager and the firm's AML compliance officer, Jane's
broker-dealer decides to file a Suspicious Activity Report. Under federal AML regulations, this
report should be filed correct answers within 30 days of the discovery of the suspicious activity
Within how many days after the end of a fiscal year must a large accelerated filer file Form 10-
K? correct answers large accelerated filers ($700 million or greater worldwide market cap) have
60 calendar days to file a Form 10-K.
To qualify for an exemption under the provisions of Rule 147, issuers must meet all of the
following requirements correct answers sold entirely to state residents, the issuer's home office
must be located within the state, and 80% of its business must be conducted in the state. It is also
required to use 80% of the proceeds raised for conducting business within the state.
A partnership wishes to participate in a private placement as an accredited investor. To qualify,
the partnership must have total assets of at least correct answers For corporations, partnership or
trusts, $5 million
The required annual rate of return that a company's equity investors expect to receive (including
dividends) is known as the correct answers Cost of equity
What would be the immediate impact of a company changing from FIFO to LIFO? correct
answers LIFO accounting would increase COGS. This will reduce both gross profit (Sales -
COGS) and net income
It is important for the sell-side adviser to monitor the data room for all of the following reasons
correct answers track buyer interest and activity, draw conclusions, and take action accordingly.
Buyers do NOT post feedback in the data room.
In a Chapter 11 filing, a Debtor-in-Possession (DIP) acts correct answers in a fiduciary capacity
with trustee powers granted by the bankruptcy court. The DIP's role is to protect assets for the
benefit of creditors
Under a Chapter 11 Bankruptcy reorganization plan, what percentage of a creditor committee is
required to approve the plan? correct answers at least two-thirds in $ and more than one-half in
number of the allowed claims
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