1. Lisa is interested in purchasing 1,000 shares of TJH, Inc. when the shares are issued. Her broker just gave Lisa a preliminary prospectus on these shares for her to review as she waits for the shares to be cleared for sale. What is the name of this prospectus?

a. Red herring

b. Tombstone

c. Green Shoe

d. Rights offer

e. Spread

2. The quiet period is designed to do which one of the following?

a. Ensure that all potential investors have fair access to identical information.

b. Ensure that all bidders are heard in a Dutch auction.

c. Quiet the market so the SEC can fairly evaluate a new securities offer.

d. Prevent the original investors in a firm from selling their shares and destabilizing a security's price during the first six months of public trading.

e. Stabilize the aftermarket.

3. What is a prospectus?

a. a letter issued by the SEC authorizing a new issue of securities

b. a report stating that the SEC recommends a new security to investors

c. a letter issued by the SEC that outlines the changes required for a registration statement to be approved

d. an advertisement in a financial newspaper that describes a security offering

e. a document that describes the details of a proposed security offering along with relevant information about the issuer

4. Lewis Materials recently offered 15,000 shares of stock but only received payment for 12,500 shares since that was all the shares the underwriters could sell. What type of underwriting was this?

a. Dutch Auction

b. Firm commitment

c. Private placement

d. Syndicated

e. Best efforts

5. Which one of the following projects is most likely to be financed with venture capital?

a. Additional warehouse space for a profitable trucking firm

b. New product for an international plastics manufacturing company

c. Domestic outlet for a large global exporter

d. Seasonal merchandise for a major retailer

e. Prototype for a newly patented hand tool by an individual inventor