Series 53: Chapter 4 Practice Questions

Chapter 4 Practice Questions

1. 1. A bond has a face value of $1,000. The manager’s fee is 1/10 of a bond point. What is the dollar value of the manager’s fee?
2. A. $0.10
3. B. $1.00
4. C. $10.00
5. D. $100.00
6. 2. The spread in a municipal underwriting is equal to:
7. A. The manager’s fee plus the total takedown
8. B. The manager’s fee plus the additional takedown
9. C. The additional takedown plus the concession fee
10. D. The total takedown plus the additional takedown
11. 3. An issue is allotted among five underwriters, with each underwriter receiving a fifth of the issue. Members A and B sell their full allotments, Members C and D each sell half their allotments, and Member E sells three-quarters of its allotment. If the syndicate uses an Eastern account, what is Member C’s remaining liability?
12. A. 5% of the issue
13. B. 10% of the issue
14. C. 20% of the issue
15. D. 40% of the issue
16. 4. Which of the following would be required in the preliminary official statement for a municipal GO bond?
17. A. The maturity structure
18. B. The offering price

19. C. The interest rates
20. D. 
The selling compensation
21. 5. Underwriters of municipal bonds must give prospective customers a preliminary offering statement:
22. A. At or before the time of any sale
23. B. At least one business day prior to any sale
24. C. No later than one business day after any sale
25. D. Within one business day of any customer request
26. 6. The order period for a municipal bond offering may last:
27. A. From 1 hour to 24 hours
28. B. From 1 hour to 5 days
29. C. From 1 day to 5 days
30. D. From 1 day to 10 days
31. 7. Underwriters of municipal bonds must provide the MSRB with copies of any amendments to the official statement:
32. A. On an ongoing basis
33. B. Until the settlement of the underwriting
34. C. Until the 25th d