Series 79 questions with 100% correct answers

Series 79 The letters NAV stand for - correct answer Net asset value refers to an investment company's total assets less its total liabilities. Mutual funds and unit investment trusts calculate their NAV every business day, often after market close. Closed-end funds are not subject to the requirement to calculate NAV on a daily basis. All of the following are non-marketable U.S. Government securities EXCEPT - correct answer Treasury Bills trade actively on the secondary market. SLGS, Series EE and Series HH are non-marketable instruments that are issued to subscribers and cannot be sold in the secondary market. All of the following statements regarding credit ratings and rating agencies are true EXCEPT - correct answer Although high ratings often make a bond more marketable, they do not ensure low volatility and high liquidity, as there are many other factors that contribute to the price of a bond, namely interest rates. Internal Revenue Code 388(h)(10) describes which of the following? - correct answer Internal Revenue Code 388(h)(10) describes an asset sale where the assets are marked up to their purchase price. This affords favorable tax treatment to the purchaser in the form of increased depreciation. After the filing of its 10-Q for its recently finished fiscal 3rd quarter, a public company announces an acquisition to be financed entirely with a new bond issue. In making the acquisition, the acquirer will also be repaying all of the target's existing debt. In calculating the pro forma Enterprise Value / LTM EBITDA trading multiple for the company, what adjustments does the banker need to make? - correct answer Both the numerator and denominator need to be adjusted to calculate the pro forma Enterprise Value / LTM EBITDA trading multiple for the acquirer. For the numerator, the acquirer's Enterprise Value is increased by the dollar amount of the new bond, while the denominator is increased by the target's LTM EBITDA (including synergies). During an applicable Regulation M restricted activity period, an issuer is restricted from all of the following activities EXCEPT - correct answer Odd lots transactions (typically less than 100 shares) during the applicable restricted period may be completed by offering participants in accordance with applicable written policies and procedures defined by Regulation M. This is allowed because they are not likely to influence the price of the security.