CIE- chapter 8 Questions With Complete Solutions
A 6 Month Resale Restriction Applies to the Sale of Securities
to Non-State Residents Under correct answers Rule 147
offerings (intrastate)
A pipe is this type of intestment correct answers Private
investment in public equity. An unregistered deal brought to
market by a public company
A preliminary prospectus contains most of the information an
investor needs to evaluate an offering except correct answers
Time-sensitive details of the transition, such as the offer price
and number of shares being registered
. These are not finalized until after the preliminary prospectus is
published
A rights offering is typically followed by what kind of
underwriting correct answers A standby underwriting, where a
broker dealer takes on shares not purchased by existing
shareholders.
A security that is not subject to SEC registration requirements
correct answers Exempt security
A shelf registration correct answers A type of securities
registration that allows an issuer to file one registration that may
cover several subsequent public offerings, made when market
conditions are most favorable is
,A term that covers actions taken by underwriters to support the
prices of IPOs in the open market, after the issue opens for
trading correct answers Stabilization or stabilizing bids. UW are
allowed to stabilize with bids at or below the public offering
price.
A type of securities offering in which UW acts as agents, with
no financial responsibility for any unsold securities correct
answers Best efforts
Access equals delivery refers to the correct answers Electronic
delivery of prospectuses
Addresses reclassifications, mergers, and transfers of company
assets correct answers Rule 145
Addresses the sale of nonregistered foreign and domestic
securities to institutional investors correct answers Rule 144A
All shareholders who offer to sell shares in a tender offer must
receive the same price. This is referred to as correct answers
ALl holders best price. The buyer can't offer better t erms to
someshareholders tendering shares than others. All shareholders
must receive the tender price
An accredited investor is defined as an individual with net
income of correct answers $200k or more in each of the two
most re cent years; $300k if joint income with a spouse OR
$1mm of net worth
, an offering in which the shares offered to the public are being
sold by shareholders, not the company itself, is called correct
answers A secondary offering
An underwriter's stabilizing bid must be made at a price that is
correct answers At or below the public offering price (POP)
Best efforts correct answers a type of underwriting where the
underwriters act as agents and have no financial responsibility
for any unsold securities
Competitive bid correct answers A process during which an
issuer selects an UW solely based on price
Control stock correct answers Defined under Rule 144 as stock
that is owned by a corporate insider and can only be sold subject
to volume limitations. Specifically, over any 90-day period, an
insider can sell the greater of 1% of the company's outstanding
shares or the average weekly trading volume during the four
weeks preceding the sale
Cooling-off period correct answers The time from the filing of
the registration statement until the SEC declares the registration
effective, allowing for public sale.
During this period, which typically lasts for at least 20 days, the
new-issue security can be marketed to the public, but there can
be no offers or sales
Disclosure Document Used to Gather Indications of Interest
During the Cooling Off Period correct answers Preliminary
Prospectus (red herring)
A 6 Month Resale Restriction Applies to the Sale of Securities
to Non-State Residents Under correct answers Rule 147
offerings (intrastate)
A pipe is this type of intestment correct answers Private
investment in public equity. An unregistered deal brought to
market by a public company
A preliminary prospectus contains most of the information an
investor needs to evaluate an offering except correct answers
Time-sensitive details of the transition, such as the offer price
and number of shares being registered
. These are not finalized until after the preliminary prospectus is
published
A rights offering is typically followed by what kind of
underwriting correct answers A standby underwriting, where a
broker dealer takes on shares not purchased by existing
shareholders.
A security that is not subject to SEC registration requirements
correct answers Exempt security
A shelf registration correct answers A type of securities
registration that allows an issuer to file one registration that may
cover several subsequent public offerings, made when market
conditions are most favorable is
,A term that covers actions taken by underwriters to support the
prices of IPOs in the open market, after the issue opens for
trading correct answers Stabilization or stabilizing bids. UW are
allowed to stabilize with bids at or below the public offering
price.
A type of securities offering in which UW acts as agents, with
no financial responsibility for any unsold securities correct
answers Best efforts
Access equals delivery refers to the correct answers Electronic
delivery of prospectuses
Addresses reclassifications, mergers, and transfers of company
assets correct answers Rule 145
Addresses the sale of nonregistered foreign and domestic
securities to institutional investors correct answers Rule 144A
All shareholders who offer to sell shares in a tender offer must
receive the same price. This is referred to as correct answers
ALl holders best price. The buyer can't offer better t erms to
someshareholders tendering shares than others. All shareholders
must receive the tender price
An accredited investor is defined as an individual with net
income of correct answers $200k or more in each of the two
most re cent years; $300k if joint income with a spouse OR
$1mm of net worth
, an offering in which the shares offered to the public are being
sold by shareholders, not the company itself, is called correct
answers A secondary offering
An underwriter's stabilizing bid must be made at a price that is
correct answers At or below the public offering price (POP)
Best efforts correct answers a type of underwriting where the
underwriters act as agents and have no financial responsibility
for any unsold securities
Competitive bid correct answers A process during which an
issuer selects an UW solely based on price
Control stock correct answers Defined under Rule 144 as stock
that is owned by a corporate insider and can only be sold subject
to volume limitations. Specifically, over any 90-day period, an
insider can sell the greater of 1% of the company's outstanding
shares or the average weekly trading volume during the four
weeks preceding the sale
Cooling-off period correct answers The time from the filing of
the registration statement until the SEC declares the registration
effective, allowing for public sale.
During this period, which typically lasts for at least 20 days, the
new-issue security can be marketed to the public, but there can
be no offers or sales
Disclosure Document Used to Gather Indications of Interest
During the Cooling Off Period correct answers Preliminary
Prospectus (red herring)
