Chapter 13

Question 1

A _____ syndicate is formed when members retain a level of liability until all bonds are sold

Answer 1

Eastern or Undivided syndicate

Question 2

Put the following four types of orders in the correct priority: Group Net, Member, Presale, Designated

Answer 2

Presale, Group Net, Designated, Member

P,G,DM

Question 3

Competitive Sale

Answer 3

The issuer invites syndicates to bid on the issue. The lowest interest cost wins the competition.

Question 4

When one member earns the total takedown, this is know as a:

Answer 4

member order

Question 5

Official Statement

Answer 5

The disclosure document, similar to a prospectus, used for municipal bonds.

Question 6

Calls attention to the new issuance of securities and members of the syndicate.

Answer 6

Tombstone Ad

Question 7

Underwriting Agreement

Answer 7

The document that establishes the agreement between the issuer and the underwriter

Question 8

A summary or abstract of an official statement is considered:

Answer 8

retail communication

Question 9

Orders that benefit the entire syndicate by percentage of liability.

Answer 9

Group net orders

Question 10

Orders that are placed prior to the actual awarding of the issue of the syndicate.

Answer 10

Presale orders

Question 11

The primary purpose of the Securities Act of 1933:

Answer 11

Provide investors with full and fair disclosure regarding new issues (prospectus)

Question 12

The Green Shoe Clause allows the issuer to expand the offering by a maximum of:

Answer 12

15%

Question 13

The _____ gives underwriters the ability to buy additional shares from the issuer to cover over-allotments.

Answer 13

Green Shoe Clause

Question 14

A _____ syndicate is when members are responsible for their specific allocation.

Answer 14

Western or Divided syndicate

Question 15

When bidding on a new issue, underwriters first determine:

Answer 15

reoffering yield

Question 16

If a bond counsel has no concerns related to the new offering, the counsel may render a(n):

Answer 16

unqualified opinion

Question 17

If a bond counsel has questions about the legality of an issue or a lawsuit is pending, the counsel may render a(n):

Answer 17

qualified opinion

Question 18

The private placement disclosure is the:

Answer 18

Offering Memorandum

Question 19

The _____ is the disclosure document concerning a Regulation A issue.

Answer 19

Offering Circular

Question 20

The Investment Banking department of a broker-dealer:

Answer 20

handles the underwriting and issuance of securities for clients

Question 21

_____ members assume liability, while firms in the _____ do not.

Answer 21

Syndicate; selling groups

Question 22

Notice of Sale

Answer 22

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

Question 23

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

Answer 23

non-binding

Question 24

Orders given to a syndicate and identify two or more members to receive credit for the sale.

Answer 24

Designated orders

Question 25

The return of municipal bonds that were originally accepted for delivery.

Answer 25

Reclamation

Question 26

The purchase of a new issue prior to settlement with the issuer can BEST be described as a:

Answer 26

When-issued transaction

Question 27

Mr. Brown is a 15% owner of SamCo, a company whose stock is listed on the New York Stock Exchange. His wife owns 4% of SamCo. If Mrs. Brown wishes to sell some of her SamCo shares, she:

Answer 27

must do so according to Rule 144