Capital Market MCQ Quiz - Multiple Choice Questions & Answers Page 2

11. A company can ensure the complete success of a rights offering by making use of a

1. standby arrangement.
2. oversubscription privilege.
3. green shoe provision.
4. shelf registration.

12. Financial intermediaries .........

1. do not invest in new long-term securities
2. include insurance companies and pension funds
3. include the national and regional stock exchanges
4. are usually underwriting syndicates

13. The Sarbanes-Oxley Act of 2002 (SOX) was largely a response to:

1. a series of corporate and accounting frauds involving Enron, Arthur Andersen, WorldCom, and numerous others.
2. a dramatic rise in the US trade deficit.
3. charges of excessive compensation to top corporate executives.
4. rising complaints by investors and security analysts over the financial accounting for stock options.

14. Because of US Securities Offering Reform ............. can take advantage of a special streamlined shelf registration process that provides for automatic effectiveness of a registration statement upon filing with the SEC (i.e., no SEC review).

1. only unseasoned issuers
2. only seasoned issuers
3. only well-known seasoned issuers (WKSIs)
4. only seasoned issuers and well-known seasoned issuers (WKSIs)