Series 79 practice questionmediumStabilization
Which of the following is true regarding stabilization activities under Regulation M in a public offering?
- AStabilizing bids must be at or below the offering price and must be identified in the prospectus✓ Correct answer
- BStabilization is always prohibited during the restricted period
- CStabilizing bids can be above the offering price if demand is strong
- DUnderwriters can stabilize without notice to the market
Explanation
Why A — Stabilizing bids must be at or below the offering price and must be identified in the prospectus
Stabilizing bids must not exceed the public offering price and must be disclosed in the prospectus. The trap is thinking stabilizing is unlimited or not subject to disclosure requirements.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 995+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Underwriting & New Financing questions
- A preliminary prospectus is delivered to an investor. Which of the following must be clearly indicated on its cover?
- Under Rule 172, how is final-prospectus delivery generally satisfied for a registered offering?
- In a Regulation D Rule 506(b) offering, what is the consequence if more than 35 non-accredited investors participate?
- Which of the following steps best demonstrates an underwriter’s reasonable investigation for Section 11 due diligence…
- A non-affiliate who owns restricted stock of a reporting company has held the shares for 13 months and wishes to sell.…
- During an IPO roadshow, which action creates the clearest Section 12(a)(2) risk?
- During the quiet period after an IPO, which of the following is an underwriter expressly prohibited from doing?
- In book-building for an IPO, which allocation practice could expose an underwriter to regulatory scrutiny for spinning?