Select the correct answer for each of the following questions.
1. In the registration and sales of new securities issues, the SEC
a. Endorses a security's investment merit by allowing its registration to "go effective."
b. Provides a rating of the investment quality of the security.
c. Disallows the registration to "go effective" if it judges the security's investment risk to be too great.
d. Allows all registrations to "go effective" if the issuing company's external accountant is satisfied that disclosures and representations are not misleading.
e. Does not make any guarantees regarding the material accuracy of the registration statement.
2. The 1933 Securities Act provides for a 20-day review period between the filing and the effective date of the registration. During this review period, the registrant is prohibited from
a. Preparing any amendments to the registration statement.
b. Announcing the prospective issue of the securities being registered.
c. Accepting offers to purchase the securities being registered from potential investors.
d. Placing an advertisement indicating by whom orders for the securities being registered will be accepted.
e. Issuing a prospectus in preliminary form.
3. Before turning over the proceeds of a securities offering to a registrant, the underwriters frequently require a comfort letter from the public accountant. The comfort letter's purpose is to
a. Remove the public distrust of a red herring by converting the letter into a prospectus.
b. Indicate whether the public accountant found any adverse financial change between the date of audit and the effective date of the securities offering.
c. Provide assurance from the public accountant's audit of the stub-period financial statements contained in the registration statement.
d. State that SEC regulations requiring the public accountant to give an opinion as an expert on the registrant's financial statements have been met.
e. Indicate that the offering conforms to New York Stock Exchange (NYSE) member requirements that a comfort letter from a public accountant be obtained before public sale of securities.

  • CreatedMay 23, 2014
  • Files Included
Post your question