SIE Midterm Exam - A) Prospectus Act B) Exchange Act C) Truth in S...

SIE Midterm Exam Which of the following is NOT a characterization of the Securities Act of 1933?

• Prospectus Act
• Exchange Act
• Truth in Securities Act
• Paper Act

(ANS- B) Exchange Act

All of the following are key differences between general obligation (GO) bonds and revenue bonds EXCEPT

• the requirement for voter approval
• the source of interest and principal payments
• being subject to statutory debt limits
• the type of issuer borrowing the funds

(ANS- D) the type of issuer borrowing the funds

A corporate bond ($1,000 PAR) purchased several years ago at $825 matures. At maturity, the bond holder will receive principal in what amount?

• An amount to be calculated based on the current yield at the time of maturity
• $175 representing the difference between the purchase price and PAR
• $1,000 face value
• $825 representing return of the purchase price

(ANS- C) $1,000 face value

The business cycle is best characterized as

• expansion, peak, contraction, trough
• expansion, prosperity, depression
• depression, recovery, prosperity, peak
• inflation, deflation, depression

(ANS- A) expansion, peak, contraction, trough 1 / 2

A final prospectus must include certain information. Which of the following is NOT required to be included?

• A statement by the SEC that the offering is neither approved or disapproved
• The underwriting contract and a list of all underwriters named in the contract
• A history of the business including any risks to purchasers that might be unique

to that business or industry

• The intended use of the proceeds for such corporate actions including

expansion, mergers, or acquisitions (ANS- B) The underwriting contract and a list of all underwriters named in the contract

Which of the following direct participation programs (DPPs) is most likely to be associated with intangible costs and depletion allowances?

• Equipment leasing program
• Real estate existing property program
• Oil and gas income program
• Real estate raw land program

(ANS- C) Oil and gas income program

Underwriters have been taking indications of interest for shares of an upcoming new issue. Indications of interest are

• binding on the underwriters only to make available the shares once the effective

date is reached

• binding on all parties
• binding only on the parties who tendered the indications to purchase the shares

once the effective date is reached

• non-binding on all parties

(ANS- D) non-binding on all parties

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