1. In a public distribution, the dealer group will generally pay a

higher price for the stock than the public.

lower price for the stock than the managing investment banker.

higher price for the stock than the managing investment banker.

lower price for the stock than members of the investment banking syndicate group.

2. Which company is a leader in rating bonds?

Goldman Sachs

Bloomberg

ValueLine

Moody's Investor Service

3. Which of the following are advantages to private bond placement over public offerings?

Higher interest costs

Greater flexibility in negotiating terms

Lower SEC registration fees

Lower interest costs

4. Which of the following bonds offers the most security to the bondholder?

Junior mortgage bonds

Senior mortgage bonds

Debenture bond

Income bond

5. Which of the following is a characteristic of leveraged buyouts?

Buyouts are usually financed by debt.

Some corporate assets are often sold after the buy-out is completed.

Funds for the buy-out are raised through securities markets.

All the above are characteristics.

5. Which of the following is not a money market instrument?

Treasury bills

Commercial paper

Negotiable certificates of deposit

Treasury bonds

6. Which of the following statements concerning futures markets is false?

Futures markets allow investors to manage risk.

Futures markets can be used to hedge against changing commodity prices.

Interest rate futures can be used to hedge against the risk of rising interest rates.

All of the statements above are true.

7. Which of the following statements is true with respect to cumulative voting?

Cumulative voting permits multiple votes for a single director.

Cumulative voting gives minority shareholders a better chance of being represented on the board of directors.

If 6 directors are to be elected and you own 100 shares, you may vote all 600 votes for one director and none for the others.

All of these are true.