Mergers and acquisitions, underwriting, and corporate finance concepts tested on the Series 79 limited representative investment banking exam.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What is a firm commitment underwriting?
- The underwriter purchases the entire security offering from the issuer and assumes the risk of selling it to investors.
- What is a best efforts underwriting?
- The underwriter agrees to sell as many securities as possible but does not guarantee to purchase any unsold shares.
- Define an all-or-none (AON) offering.
- An offering in which the underwriter must sell the entire amount or the deal is cancelled and proceeds are returned to investors.
- What is the underwriting syndicate?
- A group of underwriters who jointly agree to purchase and distribute a new security offering.
- What is the managing underwriter's role?
- The lead underwriter who organizes and coordinates the entire underwriting syndicate for the offering.
- What is an underwriting spread?
- The difference between the price the underwriter pays the issuer and the public offering price charged to investors.
- Define a green shoe option.
- An option allowing underwriters to purchase additional shares (usually up to 15% of the original offering) to cover over-allotments.
- What is a bought deal?
- An underwriting arrangement where the underwriter commits to purchase the entire issue from the issuer at a specific price with no shopping period.
- What is a lock-up agreement?
- A contract preventing insiders and large shareholders from selling shares for a specified period (usually 180 days) after an IPO.
- What is a red herring prospectus?
- A preliminary prospectus filed with the SEC that contains all offering details except the final price and number of shares.
- What is a final prospectus?
- The official document distributed to investors that includes all terms, including the final offering price and number of shares.
- Define the quiet period in securities offerings.
- The SEC-mandated period during which the issuer and underwriters are restricted from making statements that could influence investor demand.
- What is a roadshow?
- A series of presentations by company executives and underwriters to institutional investors to promote an upcoming securities offering.
- What is stabilization in the context of underwriting?
- Actions taken by underwriters to maintain or support the price of a newly issued security in the aftermarket, usually by purchasing shares.
- Define a secondary offering.
- An offering of securities by existing shareholders of a public company, not by the company itself, adding to the total shares outstanding.