1. Bright Future Company knows that upon its clients request it will have to pay out $5 million. However, Bright Future does not know when the client will make the request. What is this type of liability called?

1. Type I
2. Type II
3. Type III
4. Type IV

2. Which of the following about IPO is(are) correct?

1. Lead managers in an IPO are responsible for keeping records of the shares sold.
2. Underwriters in an IPO (initial public offering) are responsible for selling the new shares to the investors.

1. I only
2. II only
3. Both I and II
4. Neither I nor II

3. Which of the following is(are) correct?

1. In a preemptive right offering, the rights are offered to existing shareholders only.
2. The shareholders who receive the rights in preemptive rights offering can sell the rights in the market if they decide not to exercise the right.

1. I only
2. II only
3. Both I and II
4. Neither I nor II

4. Which of the following regarding Exchange Traded Funds (ETFs) is(are) correct?

1. ETFs are traded like stocks on the exchange.
2. ETFs charge subscription fee and/or redemption fee.

1. I only
2. II only
3. Both I and II
4. Neither I nor II

5. Which of the following is(are) correct?

1. The cash flows to be received by the investor from debt instruments are more certain than the cash flows to be received from equity instruments.
2. Most debt instruments do not have maturity dates and most equity instruments have maturity dates.

1. I only
2. II only
3. Both I and II
4. Neither I nor II