CNA Domain 3: Restorative Skills (Quiz 1) Welcome to your SIE Practice Quizzes. Note: We designed four (4) sets of practice quizzes for each Domain. each quiz set has 25 questions. Domain 2 (Set 1): Knowledge of Capital Markets. (25 questions) Please click NEXT to start your Free SIE Practice Quizzes right away. Best of Luck! 1. SIE, Knowledge of Capital Markets,SIE A corporation needs to build a new manufacturing facility costing several hundred million dollars. In which of the following markets could this new capital be raised? A) Government bond market B) Secondary market C) Municipal bond market D) Capital market None 2. SIE, Knowledge of Capital Markets,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? A) Additional public offering (APO) B) Private (nonpublic) securities offering C) Initial public offering D) Shelf offering None 3. SIE, Knowledge of Capital Markets,SIE Each of the following may be traded on an exchange except A) life insurance. B) bonds. C) options. D) equities. None 4. SIE, Knowledge of Capital Markets,SIE Which of the following is true regarding the primary market? A) It is regulated by the Securities Act of 1934. B) Price is determined by supply and demand. C) Issuer transactions occur in the primary market. D) The NYSE is an example of a primary market. None 5. SIE, Knowledge of Capital Markets,SIE A corporation sells shares to the investing public in order to raise capital. This is known as A) an issuer transaction. B) a secondary market transaction. C) an exchange market execution. D) a primary, or investor-to-investor, transaction. None 6. SIE, Knowledge of Capital Markets,SIE Which of the following statements is true? A) Municipalities, the federal government, and corporations can raise funds in the capital markets. B) Only municipalities can raise funds in the capital markets. C) Only corporations can raise funds in the capital markets. D) Only the federal government and municipalities can raise funds in the capital markets. None 7. SIE, Knowledge of Capital Markets,SIE The primary purpose of the Securities Act of 1933 is to A) require full and fair disclosure in connection with the sale of securities to the public. B) regulate all persons associated with industry member firms. C) authorize the designated self-regulatory organizations (SROs) to enforce securities rules and regulations. D) provide a basis for the regulation of exchanges and electronic trading venues. None 8. SIE, Knowledge of Capital Markets,SIE Regarding primary offerings, which of the following is true? A) A corporation can have only one primary offering—the initial public offering (IPO). B) There is no limit to the number of primary offerings a corporation can issue. C) A corporation can have two primary offerings—the initial public offering (IPO) and an additional public offering (APO). D) After its initial public offering (IPO), a corporation can have only one more primary offering—its subsequent primary offering (SPO). None 9. SIE, Knowledge of Capital Markets,SIE The Securities Act of 1933 requires that A) both exempt and nonexempt new issues be registered with the Securities and Exchange Commission (SEC) before public sale. B) registration with the Securities and Exchange Commission (SEC) before public sale can be made be an option for all new issues. C) all new issues be exempted from registration with the Securities and Exchange Commission (SEC) so that they may be sold to the public. D) a new issue, unless specifically exempted from the Act, be registered with the Securities and Exchange Commission (SEC) before public sale. None 10. SIE, Knowledge of Capital Markets,SIE Private placements are primarily sold to A) investment bankers. B) individuals who do not meet the definition of accredited investor. C) institutional investors. D) general public investors. None 11. SIE, Knowledge of Capital Markets,SIE Which of the following best describes a prospectus? A) It is a truth-in-lending document required whenever a loan is made to an issuer via the purchase of its debt securities. B) It is a full and fair disclosure of all material information and facts regarding the issuance of securities. C) It is a useful but not mandatory document showing detailed information intended to offer investors adequate reason to purchase shares. D) It is a document, required by securities law, which offers limited information about an issuer's securities to be offered to the public. None 12. SIE, Knowledge of Capital Markets,SIE For nonexempt securities being offered to the public for the first time by a corporate issuer, which of the following would be applicable? A) Securities Act of 1933 regulating securities traded in the secondary market B) Securities Act of 1934 regulating securities that must be offered by prospectus C) Securities Act of 1933 regulating issues that must be offered by prospectus D) Securities Act of 1934 regulating issues that must be offered by prospectus None 13. SIE, Knowledge of Capital Markets,SIE Securities sold in an issuer-related transaction would best be described as A) a primary offering. B) a balance of payments. C) a split offering. D) a secondary offering. None 14. SIE, Knowledge of Capital Markets,SIE Assets offered and traded in the securities markets can include all of the following except A) equities. B) life insurance. C) currencies. D) derivative products. None 15. SIE, Knowledge of Capital Markets,SIE A company with previously issued shares outstanding wants to issue more shares to the public. These new shares are issued in what is known as A) a secondary market offering. B) An additional public offering (APO). C) an initial public offering (IPO). D) a secondary registration. None 16. SIE, Knowledge of Capital Markets,SIE A company is looking to raise additional capital to fund an expansion plan. The company's senior management chooses to issue additional bonds to the general public. The best expression to explain this type of offering would be A) a primary offering. B) a secondary offering. C) a private securities offering. D) an initial public offering (IPO). None 17. SIE, Knowledge of Capital Markets,SIE All of the following names describe the Securities Act of 1933 except A) The Prospectus Act. B) The Exchange Act. C) The Truth in Securities Act. D) The Full and Fair Disclosure Act. None 18. SIE, Knowledge of Capital Markets,SIE Regarding the sale of a new issue, a customer is considered a restricted person if the person is A) working as a salesperson who works for the issuing firm's underwriter. B) working as a salesperson for a supplier of the issuing corporation. C) a grandparent of an associated person of a member firm. D) working as a private investigator collecting information on the issuing firm's competitors. None 19. SIE, Knowledge of Capital Markets,SIE Regarding the purchase of new equity issues (IPOs), restricted persons may A) purchase shares of a new issue only if they are employed by a broker-dealer as a registered representative. B) purchase shares of a new issue only if they work for a bank. C) purchase shares of a new issue only in amounts that are not substantial in relation to the total number of shares being issued. D) not purchase shares of a new issue. None 20. SIE, Knowledge of Capital Markets,SIE A registered representative provides financial support and housing at her home for her grandfather. Regarding the purchase of new issues, A) the registered representative is restricted, but her grandfather is not. B) both persons are considered restricted. C) neither are considered restricted. D) the grandfather is restricted, but the registered representative is not. None 21. SIE, Knowledge of Capital Markets,SIE Which of the following statements with regard to the issuance of securities is true? A) The cooling-off period beginning when a registration statement is filed with the Securities and Exchange Commission (SEC) can't last longer than 20 days. B) The Securities Act of 1933 provides criminal penalties for fraud. C) Once a registration statement has been filed with the Securities and Exchange Commission (SEC) it should be expected that the securities could be sold to the public within two business days. D) While the Securities and Exchange Commission (SEC) is reviewing a registration statement for a new offering of securities, the underwriters are permitted to solicit and accept orders for the securities from the public. None 22. SIE, Knowledge of Capital Markets,SIE Rules to protect the investing public during the public offering process include all of the following except A) limiting the number of shares of an initial public offering (IPO) that may be purchased by the issuing company's employees. B) securities industry insiders may not take advantage of their insider status to gain access to new issues for their own benefit. C) member firms may not withhold securities in a public offering for their own benefit. D) members must offer the securities at the public offering price. None 23. SIE, Knowledge of Capital Markets,SIE A company's management team has agreed to issue additional shares of common stock in part to provide an employee stock ownership plan. It is agreed the issuance of the stock is not urgent and can wait until more favorable market conditions exist. What type of registration is most suitable under these conditions? A) A shelf registration B) An expansion registration C) An employee stock ownership plan (ESOP) registration D) A shadow registration None 24. SIE, Overview of Regulatory Framework,SIE During the cooling off period, underwriters would be allowed to do all of the following except A) distribute a preliminary prospectus. B) take orders. C) take indications of interest. D) publish a tombstone. None 25. SIE, Knowledge of Capital Markets,SIE Which of the following would be allowed during the cooling off period? A) Taking orders B) Allocating shares to investors C) Distributing a prospectus D) Distributing a red herring None 1 out of 25 Time is Up! Time's up
