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FINRA Series 79 Exam 240 Questions with Verified Answers,100% CORRECT
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FINRA Series 79 Exam 240 Questions with Verified Answers
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FINRA Series 79 Exam 240 Questions with Verified AnswersDebt to capitalization ratio use _____________ - CORRECT ANSWER book value,
including of equity
Green shoe clause - CORRECT ANSWER 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 ANSWER 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 ANSWER -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 ANSWER 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 ANSWER securities, under federal and state laws
The Securities Exchange Act of 1934 defines insiders as - CORRECT ANSWER
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 ANSWER 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 ANSWER 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 ANSWER 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 ANSWER 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 ANSWER In no case
The ratio of current assets to current liabilities is most commonly known as the -
CORRECT ANSWER current ratio
Price to Book Value Calculation - CORRECT ANSWER (stock price x outstanding
shares) / (shareholders equity - goodwill)
Rule 139 exclusion is available for - CORRECT ANSWER 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 ANSWER -"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 ANSWER 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 ANSWER 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 ANSWER -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 ANSWER 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 ANSWER fixed economics
If taxable income is greater than book income, a ___________ is generated -
CORRECT ANSWER deferred tax asset
Levered Beta Calculation - CORRECT ANSWER BL= BU x (1+(1-T)*(D/E))
The spread between the nominal yield and current yield is roughly equal to -
CORRECT ANSWER the spread between the CY and YTM
If a bond is trading at a premium, rank of yield - CORRECT ANSWER NCYYc
-Nominal
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