Exercise

Answer true or false.

1. 1. _____ The Trust Indenture Act of 1939 states that all companies that issue more than $1 million of corporate bonds must sell these bonds under a trust indenture.
2. 2. _____ The 1933 Securities Act is often called the “Paper Act” because its registration statement is long and complex.
3. 3. _____ The Agreement Among Underwriters includes the duties, rights, and liability of each underwriter in the syndicate.
4. 4. _____ Both the Agreement Among Underwriters and the underwriting agreement include the price of the securities or a formula to derive it.
5. 5. _____ Both the Agreement Among Underwriters and the Selected Dealers Agreement discuss compensation for securities sold.
6. 6. _____ The greenshoe option is described in the Selected Dealers Agreement, and it is also known as the under-allotment option.

Answers

1. 1. False. It’s actually $5 million.
2. 2. False. The Securities Act of 1933 is called the Paper Act because it requires companies to register their securities wi