In stabilizing a new issue, the manager may make a "syndicate penalty bid". This means that:

• A.the underwriter will be penalized his profit on any securities repurchased from his clients
• B.all stock purchased will be returned to the issuing corporation
• C.the manager will charge the syndicate the value of the shares
• D.any shares repurchased are added to the treasury stock of the issuing corporation

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Bubba opens an account at a broker/dealer with instructions to "transfer and ship". This means that:

• A.all correspondence to Bubba must be sent registered mail
• B.each trade report must note Bubba's certificate registration instructions
• C.securities purchased must be registered in Bubba's name and then delivered to him
• D.transactions for Bubba will be transferred to another broker for processing

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Although a corporation has no earnings in a particular year, it is obligated to pay interest on all its outstanding debt except the following:

• A.convertible subordinated debentures
• B.collateral trust bonds
• C.adjustment bonds
• D.equipment trust certificates

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Bubba decides to buy equity securities. Which of the following statements is always true about what Bubba is buying?

• A.they are readily marketable
• B.they have a fixed rate of return
• C.they have a fixed maturity date
• D.they are not secured by collateral

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A mutual fund characterized by a modest sales charge and an investment in a fixed portfolio of municipal securities is a:

• A.face-amount certificate company
• B.unit investment trust company
• C.management company
• D.open-end or closed-end company

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