1- During the Road Show for a firm's IPO, institutional investors generally provide information regarding their willingness to buy shares at certain valuations. They are incentivized to provide this information in exchange for allocations of the IPO and future IPOs that the underwriting syndicate investment banks are a part of.

True

False

2-

In a Dutch Auction, all investors bidding at or above the price which allows all IPO shares to be sold will receive shares at the price that they bid.

True

False

3-

The holder (buyer) of an option will choose to exercise an in-the-money option at expiration if there is a loss on the position when including the premium paid.

True

False

4-

A firm that is hedging risk by taking a long position in a futures contract experiences what cost for the position?

a- A direct cost in the form of a premium

b- An indirect cost in the form of lost upside if the price of the underlying asset were to go up

c- An indirect cost in the form of lost upside if the price of the underlying asset were to go down

d- There are no direct or indirect costs of a hedging position using futures contracts

5-

Earnings management is "a method of manipulating financial records to improve the appearance of the company's financial position." (definition via Investopedia) Therefore, all forms of earnings management are illegal.

True

False