RN Domain 8: Health Promotion and Maintenance (Quiz 3) Welcome to your Series 7 Practice Quizzes. Note: We designed four (4) parts of practice quizzes for each Domain. Each part has 25 questions. Domain 1 (part 4): Seeks Business for the Broker Dealer from Customers and Potential Customers​​​​​​​. (25 questions) Please click NEXT to start your Free Series 7 Practice Quizzes right away. Best of Luck! 1. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 An issuer may engage in a primary offering A) once per year. B) once every 90 days. C) once. D) as often as it chooses. None 2. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 Which of the following is least likely to impact an underwriter's considerations when establishing the offering price for a new issue? A) Demand for the security by the investing public B) Projected earnings for the company C) Earnings multiples for other companies in the market in the same industry D) Geographic location of the company headquarters None 3. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 Which of the following is typically the largest component of a corporate underwriting spread and is received by members of the selling group? A) Underwriting fee B) Concession C) Manager's fee D) Reallowance None 4. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 All the following statements are false about the process of awarding an underwriting to a syndicate except A) a competitive bid underwriting is the standard for corporate offerings. B) a competitive bid underwriting is the standard for general obligation municipal underwritings. C) in a competitive bid situation, the contract is award to the syndicate bid that reflects the highest net interest cost to the issuer. D) a negotiated underwriting is the standard in a general obligation municipal underwriting. None 5. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 The spread in a municipal competitive bid is A) the difference between the stated yield and reoffering price. B) the excess of the dollar bid over par. C) the difference between the bid and production (the price at which the bonds are reoffered to the public). D) the difference between the takedown price and reoffering price. None 6. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 In the underwriting of a new municipal GO bond issue, who would earn the selling concession? A) A member of the syndicate B) The syndicate manager C) The registered representative who actually sold the bonds D) A selling group member None 7. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 Which of the following statements regarding a negotiated underwriting is not true? A) The municipality appoints the underwriter. B) Either municipal general obligation or revenue bonds can be underwritten on a negotiated basis. C) All states require that general obligation bonds (GO) must be underwritten using a negotiated process. D) The investment banker consults with the issuer to establish a price for the issue. None 8. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 If a corporation issues stock to the public at $10 per share, and the syndicate manager's fee is $0.10 per share, the underwriting fee is $0.25 per share, and the selling concession is $0.45 per share, what is the spread? A) $0.60. B) $0.90. C) $0.80. D) $0.70. None 9. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 The underwriting of most corporate issues is done on a negotiated basis. The investment banker who negotiates with the issuer on a firm commitment underwriting is known as A) the chief negotiator. B) the principal underwriter. C) the syndicate manager. D) the prime investment banker. None 10. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 Which of the following competitive bids on a new municipal issue is most likely to be awarded the bid? A) Six percent coupon with no premiums over par B) Eight percent coupon with premiums over par C) Six percent coupon with premiums over par D) Seven percent coupon with no premiums over par None 11. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 Which of the following municipal securities could have been sold in a negotiated underwriting? A) School bonds B) All of these C) Industrial development bonds D) Limited tax bonds None 12. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 In its notice of sale in The Bond Buyer, an issuer states that it will take into consideration the timing of interest payments when evaluating bids. The issuer will be using which of the following methods in its bid selection? A) Net interest cost B) Real interest cost C) Low interest cost D) True interest cost None 13. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 When an existing, long established publicly traded corporation issues a large block of new shares in order to expand or modernize, it is A) a refunding. B) an IPO. C) a primary distribution. D) a secondary distribution. None 14. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 In an undivided syndicate, liability for unsold securities rests with A) the syndicate members that failed to sell their allotment. B) the syndicate manager. C) the syndicate members on a pro rata basis. D) the issuer. None 15. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 A firm underwriting of a municipal bond issue usually has a number of different broker-dealers involved. Those who earn a commission on each sale they make are performing in the role of A) a selling syndicate member. B) a selling group member. C) a registered representative. D) the syndicate manager. None 16. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 A municipal issuer publishes an official notice of sale to indicate that the offering will be made A) through a private placement. B) on a competitive basis. C) for none of these. D) on a negotiated basis. None 17. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 A firm underwriting of a municipal bond issue usually has a number of different broker-dealers involved. Those who earn the total takedown on each sale they make are performing in the role of A) a selling syndicate member. B) the issuer. C) a selling group member. D) the syndicate manager. None 18. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 Your manager notifies you that a new municipal revenue bond issue you have been working on has been oversubscribed. How is the order acceptance priority for this issue determined? A) As outlined in the agreement among underwriters B) On a first-come, first-served basis C) As outlined in the legal opinion D) As outlined in the indenture None 19. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 The true interest cost (TIC) method of evaluating municipal bids A) can only be used for term bonds. B) is required by the MSRB if a financial advisory relationship exists. C) is required by the MSRB if a control relationship exists. D) considers the time value of cash flows. None 20. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 The manager will credit each syndicate member based on sales of that particular maturity allotted to the member, and such credits shall extinguish liability based only on such securities that are sold by the member. This statement describes an agreement among underwriters that is A) an Eastern account. B) an undivided account. C) a divided account. D) a proportionate underwriting. None 21. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 An underwriting spread is A) the amount a selling group receives. B) the amount a managing underwriter receives. C) the difference between an offering price and the proceeds to an issuer. D) the amount a syndicate receives. None 22. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 An initial public offering is conducted A) directly with principal shareholders. B) in the secondary market. C) with the issuer generally through an underwriter. D) on the New York Stock Exchange. None 23. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 When syndicate members agree to share financial responsibility for any unsold securities on an undivided basis, this contractual arrangement comprises what type of account? A) Eastern B) Selling group C) Western D) Best efforts None 24. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 ABC Corporation is offering 500,000 units to the public at $5 per unit. Each unit consists of two shares of ABC preferred stock and one perpetual warrant for half of a common share of ABC, exercisable at $5. How much capital was raised by the initial sale of the issue? A) $2.5 million B) $1.25 million C) $5 million D) $7.5 million None 25. Series 7, Seeks Business for the Broker Dealer from Customers and Potential Customers,Series 7 An order confirmed for the entire underwriting syndicate's benefit is called A) a group net order. B) a market order. C) a net designated order. D) a member at the takedown order. None 1 out of 25 Time is Up! Time's up
