Series 6

Series 6 practice questions, page 3 of 13, with answer review and explanations.

Question 11

Which of the following securities would be exempt from SEC registration requirements? I. a 15-year bond issued by the state of Colorado II. an issue of preferred stock that has an aggregate par value of $5 million III. an issue of commercial paper that has a 5-month maturity

  1. I only
  2. III only
  3. I and III only
  4. I and II only

Question 12

The investment banker bears the risk if the securities do not sell in a(n):

  1. firm commitment underwriting agreement.
  2. best efforts agreement.
  3. all-or-nothing commitment.
  4. None of the above selections are correct. The investment banking firm is never exposed to risk if the securities don’t sell.

Question 13

Which of the following steps in the underwriting process will occur last?

  1. The underwriting syndicate is formed.
  2. The selling group is organized.
  3. The public offering price is set.
  4. A red herring prospectus is circulated to the public.

Question 14

Which of the following is not a feature associated with an investment in preferred stock?

  1. The dividend is typically a fixed amount.
  2. If a dividend payment is skipped, it must typically be made up before common shareholders can receive any dividends.
  3. Preferred shareholders usually have the right to vote on members of the board of directors, mergers, and shareholder proposals.
  4. The preferred stock may be convertible to common stock.

Question 15

Nat Informed places a market order to buy 200 shares of Abercrombie & Fitch (ANF) on Thursday, September 16th. When will Nat be required to pay for this Transaction?

  1. by the end of the trading on September 15th.
  2. on the next trading day, September 16th.
  3. on Tuesday, September 21st.
  4. on Friday, September 17th.