6. The Green Shoe option is most apt to be exercised when an IPO is ______ and _____.

A. underpriced; undersubscribed

B. underpriced; oversubscribed

C. correctly priced; neither over nor undersubscribed

D. overpriced; oversubscribed

E. overpriced; undersubscribed

7.Galactic Travel wants to do an IPO but is quite concerned that the underwriters might underprice the issue. Which one of the following might the firm consider to address this concern?

A. Extended lockup period

B. Dutch auction underwriting

C. Extended quiet period

D. Best efforts underwriting

E. Standby underwriting

8. Which of these are two major benefits a firm derives from going public? I. Investment bank customers remain content II. Increased ability of the firm to raise capital III. Reselling IPO shares at higher prices on the first day of trading IV. Shareholders are better able to diversify their holdings

A. I and III only

B. II and IV only

C. I and II only

D. III and IV only

E. I and IV only

9. Spring Aire is attempting to sell 700 shares of stock via a Dutch auction. The bids received were: Bidder A: 300 shares at $44; Bidder B: 200 shares at $43; Bidder C: 400 shares at $42; and Bidder D: 300 shares at $40. How many shares will Bidder A be able to purchase?

A. 0 shares

B. 50 shares

C. 140 shares

D. 233 shares

E. 300 shares

10. Rowyn placed an order with her broker to purchase 200 shares of each of three IPOs that are being released this month. Each IPO has an offer price of $18 a share. She received allocations of 40 shares of A, 200 shares of B, and 130 shares of C. On their respective first days of trading Stock A closed at $27 a share, Stock B closed at $15 a share, and Stock C closed at $20 a share. What is her combined total first-day profit or loss on these three IPOs?

A. -$120

B. $20

C. -$30

D. $70

E. $60