APMA EXAM QUESTIONS WITH COMPLETE
SOLUTIONS
Acquisition financing Correct Answers Capital, including high-
yield bonds, is provided
to acquire other companies
Best efforts agreement Correct Answers No guarantees from
investment bankers to the
company going public—they will sell as many shares
as possible
Bridge financing Correct Answers Capital is provided for an
expected Initial Public
Offering (IPO)
Brokers Correct Answers Agents of sellers of securities who
receive a commission for executing a transaction
Day order Correct Answers An order that is good just for the
day, and if it is not
executed it expires at the end of the day
Dealer Bid-Ask Correct Answers Bid: Price at which the dealer
will buy
Ask: Price at which the dealer will sell
Dealers Correct Answers Principals who buy and sell securities
for their own accounts. Known as a market maker in an OTC
market and a specialist in a securities exchange
, Dual listing Correct Answers Companies that trade on more
than one exchange
Financial Intermediaries Correct Answers Banks, S&Ls, Credit
Unions, Brokers, Dealers, Investment Bankers, Mutual Funds,
Insurance Companies
Firm Commitment Correct Answers Investment bankers
guarantee company that entire
issue will be purchased; investment bankers absorb
loss if they fail to sell entire issue to investors
First-stage financing Correct Answers Cash is provided for
manufacturing and sales
activities
Fourth Market Correct Answers Market where institutions
trade directly with
each other. Trades are made through electronic
communications networks (ECNs), which have the
advantages of reduced trading costs, the ability to trade after
normal trading hours, and the possibility of anonymous trades.
Good-til-canceled order Correct Answers An order that will
remain in effect until
either it is executed or canceled
Green Shoes Correct Answers The right to increase the size of
an offering
SOLUTIONS
Acquisition financing Correct Answers Capital, including high-
yield bonds, is provided
to acquire other companies
Best efforts agreement Correct Answers No guarantees from
investment bankers to the
company going public—they will sell as many shares
as possible
Bridge financing Correct Answers Capital is provided for an
expected Initial Public
Offering (IPO)
Brokers Correct Answers Agents of sellers of securities who
receive a commission for executing a transaction
Day order Correct Answers An order that is good just for the
day, and if it is not
executed it expires at the end of the day
Dealer Bid-Ask Correct Answers Bid: Price at which the dealer
will buy
Ask: Price at which the dealer will sell
Dealers Correct Answers Principals who buy and sell securities
for their own accounts. Known as a market maker in an OTC
market and a specialist in a securities exchange
, Dual listing Correct Answers Companies that trade on more
than one exchange
Financial Intermediaries Correct Answers Banks, S&Ls, Credit
Unions, Brokers, Dealers, Investment Bankers, Mutual Funds,
Insurance Companies
Firm Commitment Correct Answers Investment bankers
guarantee company that entire
issue will be purchased; investment bankers absorb
loss if they fail to sell entire issue to investors
First-stage financing Correct Answers Cash is provided for
manufacturing and sales
activities
Fourth Market Correct Answers Market where institutions
trade directly with
each other. Trades are made through electronic
communications networks (ECNs), which have the
advantages of reduced trading costs, the ability to trade after
normal trading hours, and the possibility of anonymous trades.
Good-til-canceled order Correct Answers An order that will
remain in effect until
either it is executed or canceled
Green Shoes Correct Answers The right to increase the size of
an offering
