Unit 7 SIE

A company is considering raising capital without going through the registration process requirements mandated by the Securities Act of 1933. To be exempt from the act, which of the following offerings might they employ?

Private (nonpublic) securities offering

As participants in a firm commitment underwriting agreement, the underwriters know that

they, the underwriters, will be acting as principals buying the securities from the issuer.

A company that offers sales of another company's securities in a primary market transaction would best be described as

an underwriter

To qualify as an exempt transaction under Tier 1 of Regulation A, an issuer may offer a maximum of which of the following?

Up to $20 million in securities in a 12-month period

For primary and secondary markets, which of the following is true?

In the primary market, securities are sold to the public and the issuer receives the sale proceeds.

Private placements are primarily sold to

institutional investors.

All of the following issuers are exempt issuers except

ABC Railroad Power Systems, Inc.

DEF, Inc., registered to sell 1 million shares of DEF common stock. They plan to sell 500,000 shares immediately and sell the remainder of the offering within the next two years. This is called

a shelf offering

Underwriters for an IPO of Seabird Airlines stock have been taking indications of interest for shares of an upcoming new issue. These indications of interest are

nonbinding on all parties.

Public offerings of securities are regulated under

the Securities Act of 1933.

If it finds that the registration statement needs revision, expansion, or to have corrections made, the Securities and Exchange Commission (SEC) may suspend the review of the new issue and issue a deficiency letter. Once the issuer submits a corrected registration statement, the 20-day cooling-off period

resumes where it had left off.

An investor requests a preliminary prospectus for a new issue. Regarding the document which of the following is true?

It is made available between the registration date and the effective date.

Which of the following would not be found in a final prospectus?

The list of all investors in the offering

Assets offered and traded in the securities markets can include all of the following except

life insurance.

Which of the following is not an issuer of exempt securities?

First National Bank

For the primary market, which of the following is true?

Issuer transactions occur in the primary market, and securities are offered at a public offering price.

Which of the following securities is exempt from the Securities Act of 1933?

Municipal note

Primary market transactions would include which of the following?

Sale of $10 million of corporate bond by a broker-dealer acting as an underwriter

Which of the following could not be considered an institutional investor?

An accredited investor

Which of the following would be allowed during the cooling off period?

Taking indications of interest

Cypress Care Nurseries, Inc., owns and operates a chain of nurseries and is headquartered in Cypress, California. The company is considering selling shares of the company to the public in California. In order to be exempt from registration with the SEC, under Rule 147 it would need to meet several criteria. Which of these is not a listed criterion under Rule 147?

80% of the issuer’s customers must be located in the state of California.

In which type of underwriting commitment is the underwriter responsible for purchasing all the shares that are not sold to the public?

Firm commitment

Which of the following best describes the process of a shelf offering?

A process where an issuer can register securities but issue them over time rather than immediately

Which of the following securities are exempt from the Securities Act of 1933?

treasury notes

The ABC Chemical Corporation wishes to advertise its upcoming offering of common stock in a tombstone advertisement that they, the issuer, will place. When placing the tombstone advertisement, which of the following would be least likely to appear?

The expected price range of the offering

Seacoast Securities is a syndicate member for the initial public offering of WeariTech, Inc., WeariTech is a hot new issue in the wearable technology space. The S-1 registration statement has been filed but the effective date has not yet been released. This is

the cooling-off period.

A corporation seeking to raise funds in order to expand its manufacturing capacity would do so in

the capital market.

Modulux, Inc., a NYSE listed manufacturing company, was founded by Clarence Mod. Clarence is now 82 years old and is looking to divest his significant interest in Modulux to capitalize the Mod Family Foundation, a charity. He has enlisted the help of Seacoast Securities, a regional investment banker based in Seattle, to run the sale. This is an example of

a secondary offering

Which of the following is a role of an underwriter in the primary market?

To assist the issuer in bringing a new issue of securities to the market

Which of the following describes the primary purpose of a private placement under Regulation D?

To allow issuers to raise capital without registering securities with the SEC