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Free SERIES 7 Exam Braindumps (page: 32)

Page 31 of 101
PDF with 400 Questions

Assuming that the information contained in a registration statement is complete and accurate, the registration statement becomes effective:

  1. 10 days after receipt by the SEC
  2. 20 days after receipt by the SEC
  3. 30 days after receipt by the SEC
  4. only after the SEC specifically clears the issue in writing to the principal underwriter

Answer(s): D

Explanation:

only after the SEC specifically clears the issue in writing to the principal underwriter. The registration statement becomes effective when notice is received in writing from the SEC.



The Bubba Corporation is offering stock to the public for the first time. The registration statement lists 150,000 shares for sale at $400 per share. The company conducts business in a 100-mile radius that includes towns in two neighboring states. Which of the following information is not required in the preliminary prospectus for this offering?

  1. a notice in red ink to the effect that the prospectus has not been approved by the SEC
  2. a section describing how the funds from the sale will be used
  3. a statement of the company’s assets and liabilities
  4. the price at which the issue is offered

Answer(s): D

Explanation:

the price at which the issue is offered. The offering price is usually determined on the offering date and does not normally appear in the preliminary prospectus.



Bubba Securities, Inc. offers 3,000,000 shares of Top Notch Manufacturing Corporation common stock at $27 per share. The next day an advertisement appears in the Wall Street Journal announcing the offering and listing the names of some of the underwriting firms.
This ad is commonly referred to as a:

  1. public offering
  2. tombstone ad
  3. sales directive
  4. syndicate announcement

Answer(s): B

Explanation:

tombstone ad. Tombstone ads are used to announce new issues. They do not offer to buy or sell securities. They are informational only.



For what time period does a Form 144 remain in effect?

  1. 30 days
  2. 60 days
  3. 90 days
  4. one year

Answer(s): C

Explanation:

90 days. To avoid a forced sale, stock many be sold under Rule 144 over a 90-day period.






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