Chapter 6 Practice Questions
1. Randy has a 529 plan for his son Otto. He has had the plan for five years and is very happy with it. The official statement of the plan has been amended. What are the requirements for getting this amended official statement, or “sticker,” to Randy?
A. It must be sent through first class mail or through some other prompt means to Randy.
B. It must be promptly displayed on the website.
C. It must be promptly sent through EMMA, where it will be made available to the public.
D. It must be sent or emailed to Randy within 30 days of the amendment.
2. Which of the following statements about an underwriter’s disclosure obligations to customers of municipal securities transactions is correct?
A. Underwriters must deliver a copy of the official statement to their customers no later than the settlement of the transaction.
B. In a negotiated sale, the underwriter has no additional disclosure obligations.
C. In the sale of a municipal fund security, underwriters may deliver an official statement to a customer by informing them that it is available on EMMA.
D. If an official statement is not being prepared, the underwriter has no obligation to disclose this.
3. All of the following statements about advance refunding are correct except:
A. Advance refunding documents must be submitted to EMMA.
B. Advance refunding is a process where the issuer of refunding bonds seeks to lower its interest payments by paying off previously issued bonds with newly issued bonds.
C. Underwriters must submit the required information related to advance refunding no later than ten days after the closing date.
D. A primary offering may be used to advance refund outstanding municipal securities.
4. If a new issue is a private placement, or sold to no more than 35 non-accredited municipal securities investors:
A. No underwriter is requi