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NEW QUESTION # 238
A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering.
What subscription ratio is the corporation establishing for each new share?
Answer: D
Explanation:
6 rights per share. Each share receives a right and there are six million shares receiving rights to one million new shares. So six rights are required for one share.
NEW QUESTION # 239
All sales literature and advertising relating to investment company shares prepared by members of FINRA must be filed for review with which of the following?
Answer: D
Explanation:
FINRA. Sales literature regarding investment company shares must be filed with FINRA within three days after the first use.
NEW QUESTION # 240
Under a leaseback arrangement used to finance construction of local schools, who is the issuer of the municipal bonds?
Answer: B
Explanation:
Explanation/Reference:
Explanation: a legal authority created for this purpose. Bonds with a leaseback arrangement are issued by a specially created entity.
NEW QUESTION # 241
What is represented by the net investment income of an open-end investment company?
Answer: A
Explanation:
net income from dividend and interest paid on securities in the fund portfolio. This is the definition of net investment income, which excludes gains on sales of securities.
NEW QUESTION # 242
A CMO is issued that has three tranches. One has an average life of 2 years. A second has an average life of 10 years. The third has an average life of 30 years. Initially, interest payments are distributed in this order:
Answer: A
Explanation:
equally to all CMO holders of any tranche. All bondholders share equally in the interest payments. Only principal payments are directed to the owners in each tranche in sequential order.
NEW QUESTION # 243
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