金融市场与金融机构基础FabozziChapter13.docx
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金融市场与金融机构基础FabozziChapter13
FoundationsofFinancialMarketsandInstitutions,4e（Fabozzi/Modigliani/Jones）
Chapter13PrimaryMarketsandtheUnderwritingofSecurities
MultipleChoiceQuestions
1TheTraditionalProcessforIssuingNewSecurities
1）The________involvesthedistributiontoinvestorsofnewlyissuedsecuritiesbycentralgovernments,itsagencies,municipalgovernments,andcorporations
A）OTCmarket
B）secondarymarket
C）primarymarket
D）stockmarket
Answer:
C
Diff:
1
Topic:
13.1TheTraditionalProcessforIssuingNewSecurities
Objective:
13.1theroleinvestmentbankersplayinthedistributionofnewlyissuedsecurities
2）Theparticipantsinthemarketplacethatworkwithissuerstodistributenewlyissuedsecuritiesarecalledinvestmentbankers.Investmentbankingisperformedbytwogroups:
________.
A）commercialbanksandsecuritieshouses.
B）hometownbanksandsecuritieshouses.
C）commercialbanksandbankhouses.
D）savings&loansandbankhouses.
Answer:
A
Diff:
2
Topic:
13.1TheTraditionalProcessforIssuingNewSecurities
Objective:
13.1theroleinvestmentbankersplayinthedistributionofnewlyissuedsecurities
3）ThetraditionalprocessintheUnitedStatesforissuingnewsecuritiesinvolvesinvestmentbankersperforminguptothreefunctions.WhichofthebelowisNOToneofthesefunctions?
A）Onefunctionisadvisingtheissueronthetermsandthetimingoftheoffering.
B）Onefunctionissellingthesecuritiestotheissuer.
C）Onefunctionisdistributingtheissuetothepublic.
D）Onefunctionisbuyingthesecuritiesfromtheissuer.
Answer:
B
Comment:
ThetraditionalprocessintheUnitedStatesforissuingnewsecuritiesinvolvesinvestmentbankersperformingoneormoreofthefollowingthreefunctions:
（1）advisingtheissueronthetermsandthetimingoftheoffering,
（2）buyingthesecuritiesfromtheissuer,and
（3）distributingtheissuetothepublic.
Diff:
1
Topic:
13.1TheTraditionalProcessforIssuingNewSecurities
Objective:
13.1theroleinvestmentbankersplayinthedistributionofnewlyissuedsecurities
4）Aninvestmentbankermaymerelyactasanadvisorand/ordistributorofthenewsecurity.Thefunctionofbuyingthesecuritiesfromtheissueriscalled________.
A）advising.
B）distributing.
C）purchasing.
D）underwriting.
Answer:
D
Diff:
2
Topic:
13.1TheTraditionalProcessforIssuingNewSecurities
Objective:
13.1theroleinvestmentbankersplayinthedistributionofnewlyissuedsecurities
5）An________isacommonstockofferingissuedbycompaniesthathaveNOTpreviouslyissuedcommonstocktothepublic.
A）initialprivateissuance（IPI）
B）seasonedequityoffering（SEO）
C）initialpublicoffering（IPO）
D）seasonedoffering（SO）
Answer:
C
Diff:
1
Topic:
13.1TheTraditionalProcessforIssuingNewSecurities
Objective:
13.1theroleinvestmentbankersplayinthedistributionofnewlyissuedsecurities
6）WhichofthebelowstatementsisFALSE?
A）Asecondarycommonstockofferingisanofferingofcommonstockthathadbeenissuedinthepastbythecorporation.
B）Forasecondaryoffering,therangeforthegrossspreadasapercentageoftheamountraisedisbetween3%and6%.
C）Fortraditionalbondofferings,thegrossspreadasapercentageoftheprincipalisaround100basispoints.
D）Thetypicalunderwrittentransactioninvolvessomuchriskofcapitallossthatasingleinvestmentbankingfirmundertakingitalonewouldbeexposedtothedangeroflosingasignificantportionofitscapital.
Answer:
C
Comment:
Fortraditionalbondofferings,thegrossspreadasapercentageoftheprincipalisaround50basispoints.
Diff:
2
Topic:
13.1TheTraditionalProcessforIssuingNewSecurities
Objective:
13.2theriskassociatedwiththeunderwritingofasecurity
2RegulationofthePrimaryMarket
1）Underwritingactivitiesareregulatedbythe________.
A）InitialPublicOfferingsMarket（IPOM）.
B）SecuritiesandExchangeCommission（SEC）.
C）InvestmentBankingIndustry（IBI）.
D）FederalBureauofInvestigation（FBI）.
Answer:
A
Diff:
1
Topic:
13.2RegulationofthePrimaryMarket
Objective:
13.4howtheSECregulatesthedistributionofnewlyissuedsecurities
2）Thetypeofinformationcontainedintheregistrationstatementincludes________.
A）thenatureofthebusinessoftheissuerandkeyprovisionsorfeaturesofthesecurity.
B）thenatureoftheinvestmentrisksassociatedwiththesecurityandthebackgroundofmanagement.
C）thenatureofthebusinessoftheissuerandthebackgroundofmanagement.
D）Allofthese
Answer:
D
Comment:
Thetypeofinformationcontainedintheregistrationstatementisthenatureofthebusinessoftheissuer,keyprovisionsorfeaturesofthesecurity,thenatureoftheinvestmentrisksassociatedwiththesecurity,andthebackgroundofmanagement.
Diff:
2
Topic:
13.2RegulationofthePrimaryMarket
Objective:
13.5whataregistrationstatementis
3）Theregistrationisactuallydividedintotwoparts.PartIisthe________.Itisthispartthatistypicallydistributedtothepublicasanofferingofthesecurities.PartIIcontains________,whichisnotdistributedtothepublicaspartoftheofferingbutisavailablefromtheSECuponrequest.
A）registration;additionalinformation
B）prospectus;supplementalinformation
C）supplementalinformation;registration
D）beginninginformation;prospectus
Answer:
B
Diff:
2
Topic:
13.2RegulationofthePrimaryMarket
Objective:
13.5whataregistrationstatementis
4）TheSecuritiesActof1933________.
A）doesnotprovideforpenaltiesintheformoffinesand/orimprisonmentiftheinformationprovidedisinaccurateormaterialinformationisomitted.
B）governstheissuanceofsecurities.
C）providesthatinvestorswhopurchasethesecurityareentitledtosuetheissuerbutnottheunderwritertorecoverdamagesiftheyincuralossasaresultofthemisleadinginformation.
D）providesthatfinancialstatementsmustbeincludedaftertheregistrationstatement.
Answer:
B
Comment:
TheSecuritiesActof1933governstheissuanceofsecurities.TheactrequiresthataregistrationstatementbefiledwiththeSECbytheissuerofasecurity.Financialstatementsmustbeincludedintheregistrationstatement,andtheymustbecertifiedbyanindependentpublicaccountant.Theactprovidesforpenaltiesintheformoffinesand/orimprisonmentiftheinformationprovidedisinaccurateormaterialinformationisomitted.Moreover,investorswhopurchasethesecurityareentitledtosuetheissuertorecoverdamagesiftheyincuralossasaresultofthemisleadinginformation.Theunderwritermayalsobesuedifitcanbedemonstratedthattheunderwriterdidnotconductareasonableinvestigationoftheinformationreportedbytheissuer.Oneofthemostimportantdutiesofanunderwriteristoperformduediligence.
Diff:
2
Topic:
13.2RegulationofthePrimaryMarket
Objective:
13.4howtheSECregulatesthedistributionofnewlyissuedsecurities
5）WhichofthebelowstatementsisTRUE?
A）ThefilingofaregistrationstatementwiththeSECmeansthatthesecuritycanbeofferedtothepublic.
B）WhentheSECdeclarestheregistrationstatementis"effective,"itmeansthatanamendmenttotheregistrationstatementcanbefiled.
C）TheregistrationstatementmustbereviewedandapprovedbytheSEC'sDivisionofCorporateFinancebeforeapublicofferingcanbemade.
D）TheapprovaloftheSECmeansthatthesecuritieshaveinvestmentmeritorareproperlypricedorthattheinformationisaccurate.
Answer:
C
Comment:
ThefilingofaregistrationstatementwiththeSECdoesnotmeanthatthesecuritycanbeofferedtothepublic.TheregistrationstatementmustbereviewedandapprovedbytheSEC’sDivisionofCorporateFinancebeforeapublicofferingcanbemade.Typically,thestaffofthisdivisionwillfindaproblemwiththeregistrationstatement.Thestaffthensendsa"letterofcomments"or"deficiencyletter"totheissuerexplainingtheproblemithasencountered.Theissuermustremedyanyproblembyfilinganamendmenttotheregistrationstatement.Ifthestaffissatisfied,theSECwillissueanorderdeclaringthattheregistrationstatementis"effective,"andtheunderwritercansolicitsales.TheapprovaloftheSEC,however,doesnotmeanthatthesecuritieshaveinvestmentmeritorareproperlypricedorthattheinformationisaccurate.Itmerelymeansthattheappropriateinformationappearstohavebeendisclosed.
Diff:
3
Topic:
13.2RegulationofthePrimaryMarket
Objective:
13.5whataregistrationstatementis
6）Aredherringis________.
A）aperiodofwaitingforSECapproval.
B）anamendedprospectus.
C）apreliminaryprospectus.
D）aprospectusprintedfullyinredink.
Answer:
C
Comment:
Duringthewaitingperiod,theSECdoesallowtheunderwriterstodistributeapreliminaryprospectus.Becausetheprospectushasnotbecomeeffective,itscoverpagestatesthisinredinkand,asaresult,thepreliminaryprospectusiscommonlycalledaredherring.
Diff:
2
Topic:
13.2RegulationofthePrimaryMarket
Objective:
13.4howtheSECregulatesthedistributionofnewlyissuedsecurities
3VariationsintheUnderwritingProcess
1）Notalldealsareunderwrittenusingthetraditionalsyndicateprocess.Forexample,variationsintheUnitedStates,theEuromarkets,andforeignmarketsinclude________.
A）theauctionprocessandrightsofferingfortheunderwritingofbonds.
B）theboughtdealoftheEurostockmarket.
C）arightsofferingforunderwritingcommonstock.
D）Allofthese
Answer:
C
Comment:
Notalldealsareunderwrittenusingthetraditionalsyndicateprocesswehavedescribed.VariationsintheUnitedStates,theEuromarkets,
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