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ABA CTFA Practice Test - Questions Answers, Page 28

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Question 271

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If an investment banker has agreed to sell a new issue of securities on a best-efforts basis, the issue:

Most likely involves an unusually large stock offering
Most likely involves an unusually large stock offering
Most likely involves bonds instead of common stock
Most likely involves bonds instead of common stock
Results in no assumption of underwriting risk by the investment banker
Results in no assumption of underwriting risk by the investment banker
Most likely involves a well-established, large company
Most likely involves a well-established, large company
Suggested answer: C
asked 16/09/2024
Michael Grisonichi
44 questions

Question 272

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In mortgage loans closing costs are made up of all of the following Except:

Loan application and origination fees paid to the lender
Loan application and origination fees paid to the lender
Loan application and origination fees paid to the borrower
Loan application and origination fees paid to the borrower
Mortgage points
Mortgage points
Title search
Title search
Suggested answer: B
asked 16/09/2024
Mark Anthony Mondonedo
37 questions

Question 273

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A preliminary prospectus is known as a:

Golden Parachute
Golden Parachute
Red herring
Red herring
Blue sky
Blue sky
Green shoe
Green shoe
Suggested answer: B
asked 16/09/2024
Alvin Gonzalez
44 questions

Question 274

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Letter stock is:

A handwritten certificate representing a corporate IOU
A handwritten certificate representing a corporate IOU
A mass mailing offering a security for sale
A mass mailing offering a security for sale
Securities issued by the United States Postal Service
Securities issued by the United States Postal Service
Privately placed common stock that cannot be immediately resold to the general public
Privately placed common stock that cannot be immediately resold to the general public
Suggested answer: D
asked 16/09/2024
Charl Grove
40 questions

Question 275

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The actual market value of a right will differ from its theoretical value for all of the following reasons Except for:

The size of the firm's marginal tax rate
The size of the firm's marginal tax rate
The amount of transactions costs incurred
The amount of transactions costs incurred
Investor speculation
Investor speculation
The irregular exercise and sale of rights over the subscription period
The irregular exercise and sale of rights over the subscription period
Suggested answer: A
asked 16/09/2024
Istvan Flach
32 questions

Question 276

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When the investment banker bears the risk of not being able to sell a new security at the established price, this is known as:

A best efforts offering
A best efforts offering
Underwriting
Underwriting
Shelf registration
Shelf registration
Making a market
Making a market
Suggested answer: B
asked 16/09/2024
Ibrahim Ramku
51 questions

Question 277

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To say that there is 'asymmetric information' in the issuing of common stock or debt means that:

Investors have nearly perfect information
Investors have nearly perfect information
The markets have nearly perfect information
The markets have nearly perfect information
Investors have more accurate information than management has
Investors have more accurate information than management has
Management has more accurate information than investors have
Management has more accurate information than investors have
Suggested answer: D
asked 16/09/2024
asdf asdf
42 questions

Question 278

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A best efforts offering is sometimes used in connection with a of new, long-term securities.

Private placement
Private placement
Privileged subscription
Privileged subscription
Public issue
Public issue
All of the above
All of the above
Suggested answer: C
asked 16/09/2024
ADAMA DAO
43 questions

Question 279

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_____________ is a financing made available by a builder or a seller to a potential new home buyer at well below market interest rate, often only for a short period, is called:

Buydown
Buydown
Prerequisite
Prerequisite
FHA
FHA
Growing equity mortgage
Growing equity mortgage
Suggested answer: A
asked 16/09/2024
ali ghoubali
40 questions

Question 280

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A loan on which payments equal to half the regular monthly payments is called:

Biweekely mortgage
Biweekely mortgage
Semiweekely mortage
Semiweekely mortage
Growing equity mortgage
Growing equity mortgage
None of these
None of these
Suggested answer: A
asked 16/09/2024
Rudy Raijmakers
43 questions
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A tax structure in which the larger the amount of taxable income, the higher the rate at which it is taxed is:
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