1. What is the legal document called that is provided to potential investors and describes a new security offering?

A. Prospectus

B. Security agreement

C. Formal filing

D. Registration statement

E. Public statement

2. A publicly-traded firm has just decided to issue an additional 10,000 shares of common stock. The firm plans to offer these shares to the general public next month. Which term applies to this issue of securities?

A. Initial public offering

B. Private placement

C. In-house offering

D. Rights offering

E. Seasoned equity offer

3. The difference between the price an underwriter pays to a securities' issuer and the price at which the securities are offered for sale is called the:

A. markup.

B. commission.

C. spread.

D. rights price.

E. private price.

4. Which one of the following terms is defined as an underwriting for which the underwriters assume full responsibility for any unsold shares?

A. Initial public offering

B. Best efforts underwriting

C. Firm commitment underwriting

D. Rights offer

E. Private placement

5. Which one of the following is an underwriting of securities where the final offer price is determined by investor bids?

A. Private placement

B. Best efforts underwriting

C. Initial public offering

D. Green Shoe option

E. Dutch auction