Which of the following activities are permitted during the "cooling off" period associated with a new
offering?
I. A preliminary prospectus may be provided to prospective investors.
II. The security can be registered in any states in which it will be sold.
III. The management of the issuing firm may give interviews in which they discuss the market for their
products and future revenue expectations.
IV. The underwriter of the issue may run a tombstone advertisement in the Wall Street Journal to
announce the upcoming offering.

• A. I, III and IV only
• B. I only
• C. I, II and IV only
• D. I and IV only

Mr. Investor has purchased 100 shares of the common stock of the Everyman Corporation. As such,
which of the following is not a right that Mr. Investor has?

• A. the right to vote on the members of Everyman's board of directors
• B. the right to vote on any proposed changes to the corporate bylaws
• C. the right to vote on the purchase of a major piece of property that Everyman is considering
• D. the right to receive dividends, if declared

The difference between a "redemption fee" and a "rear-end load" is that:

• A. a rear-end load is used to compensate a salesperson who has sold shares of the fund; a redemption
  fee is charged to offset the expenses a fund incurs in processing share redemptions.
• B. the redemption fee refers to charges incurred by the fund when it sells securities it owns; the rear-end
  load is a fee that is incurred by investors in the fund when they redeem their shares of the fund.
• C. There is no difference. These are synonymous terms.
• D. the redemption fee is another name for a 12b-1 fee, which is an annual expense associated with the
  fund.

The stock of eBay, Inc. (EBAY) currently has a beta of 1.67. Based on this, which of the following
statements are necessarily true?
I. If the market is up 5%, an investor can expect the returns on eBay to increase by 1.67 times this amount,
or 8.35%.
II. eBay would be a particularly good investment for an investor with a short investment horizon.
III. The returns on eBay are more volatile than the returns on the market in general.
IV. eBay has more unsystematic risk than the market in general.

• A. I only
• B. I, II, III, and IV
• C. I and III only
• D. I and II only

Sarah Slick is kicking herself for having bought the stock of Bounce, Inc.at a higher price than she needed
to have paid. She bought it at $50 a share on November 20th and watched its price drop during December.
Ms. Slick is confident that Bounce's stock price will bounce back (pun intended), but she decides that in
the meantime, she will sell her shares and use the realized capital loss to offset some of the capital
gains she has realized on other investments during the year. Thus, on December 30th, she sells her
shares of Bounce for $40 a share. During the first couple weeks of the new year, Sarah observes
Bounce's price creeping upward, and she buys the same number of shares she previously sold for $45 a
share on January 18th. Given this scenario, which of the following statements is true?

• A. Although Sarah did not wait the requisite 30 days after her sale of Bounce shares to repurchase them,
  she can still deduct her realized capital loss of $10 a share when calculating her taxes for that tax year
  since her repurchase of the shares didn't occur until the following tax year.
• B. Because Sarah did not wait the requisite 30 days after her sale of Bounce shares to repurchase them,
  she cannot deduct her realized capital loss of $10 a share when calculating her taxes for that tax year.
• C. Because Sarah waited the requisite 30 days after purchase before selling her shares in Bounce, she
  can deduct her realized capital loss of $10 a share when calculating her taxes for that tax year.
• D. The SEC may file civil charges against Sarah for engaging in an illegal "wash sale."