Series 7: Chapter 12 Practice Questions

Chapter 12 Practice Questions

1. 1. In the cooling-off period, which of the following would not be allowed?
2. A. Make an offer to sell a security with a preliminary prospectus
3. B. Taking orders for the security
4. C. Publish a tombstone ad
5. D. Distribute a preliminary prospectus
6. 2. A Japanese company would like to raise $20,000,000 through an offering of securities to U.S. residents. They would like to publicly advertise their offering, but they are okay only selling to accredited investors. They are looking for a way around the traditional public registration process. What would be the best exemption/safe harbor to suit their needs?
7. A. Regulation A
8. B. Rule 147
9. C. Regulation S
10. D. Regulation D, Rule 506(c)
11. 3. Rule 144A allows issuers and non-issuers to sell restricted securities to _____ without restrictions.
12. A. Accredited investors
13. B. Qualified institutional buyers
14. C. Institutional investors
15. D. Retail investors
16. 4. J.P. has just bought 100 shares of XYZ Corporation from the CEO of the corporation. XYZ Corporation files annual and quarterly reports with the SEC. These shares were not restricted in the hands of the CEO. These shares are:
17. A. Subject to both holding period restrictions and volume limits
18. B. Subject to holding period restrictions only
19. C. Subject to volume limits only
20. D. Subject to neither holding period restrictions or volume limits
21. 5. In which of the following situations will a company be required to file a registration statement with the SEC?
22. A. Stock split
23. B. Merger where the stock is exchanged
24. C. Dividend
25. D. Acquisition where the stockholders are paid in cash
26. 6. John owns a couple of pizza restaurants. His pizza is extremely popular and he would like to raise money to expand his business by selling securities. He would like to rely on a Rule 147 intrasta