Exercise

Answer true or false.

1. _____ The Trust Indenture Act of 1939 states that all companies that issue more than $10 million in corporate bonds must sell these bonds under a trust indenture.

2. _____ The 1933 Securities Act is often called the “Paper Act” because its registration statement is long and complex.

3. _____ The Agreement Among Underwriters includes the duties, rights, and liability of each underwriter in the syndicate.

4. _____ Both the Agreement Among Underwriters and the underwriting agreement include the price of the securities or a formula to derive it.

5. _____ Both the Agreement Among Underwriters and the Selected Dealers Agreement discuss compensation for securities sold.

6. _____ The greenshoe option is described in the Selected Dealers Agreement, and it is also known as the under-allotment option.

Answers

1. False. It’s actually $50 million.

2. False. The Securities Act of 1933 is called the Paper Act because it requires companies to register their securities with SEC, which was traditionally done on paper. It also required companies to disclose