SIE Unit 1-6 quiz
Naked Call Writing
A 65-year-old investor is looking to earn additional income in her securities portfolio without much risk. Which of the following would likely be the least acceptable trading strategy for this investor?
a bond
A certificate stating a borrower's obligation to pay back a specific amount of money on a specific date to an investor is
the option contract expires without being exercised.
A customer writes (sells) a call. This customer will realize the maximum gain if
An investor believes the price of an exchange-listed stock will likely fall in the near term. Which of the following option strategies would best support this belief? Buying puts Which of the following securities provides U.S. investors with a way to gain exposure to the common stock of a foreign issuer?
ADRs are a type of equity security that simplify foreign investing for Americans. An ADR is created when common shares are purchased in the foreign company's home market. These shares are then deposited in a foreign branch of a U.S. bank and a receipt (the ADR) is created. The ADR trades in the United States and is denominated in U.S. currency. A GNMA is a type of mortgage-backed security. A CMO is a mortgage-backed derivative. A STRIP is a zero-coupon Treasury security.
unit investment trust. mutual fund. MUNICIPAL BOND POLL . face-amount certificate company.
All of the following are identified as types of investment companies in the Investment Company Act of 1940 except
except lose the premium if the contract expires.
All of the following terms and phrases are associated with the sell side of the contract
Investment Risk
An investor has a bond maturing during a time when interest rates are falling. It is likely that the investor, wanting to keep the funds invested, would be most concerned with
Face Amount Certificate Company
An investor has entered into a contract to pay an investment company a specific sum of money in exchange for the company's agreement to pay the investor a specific (larger) sum of money on a specific date in the future. The investment company must be
can be corporate and both the federal and municipal governments.
An issuer of bonds
All else being equal, which of the following preferred would pay the highest dividend?
Callable preferred is a benefit to the issuer—not the investor—so callable has to pay a higher dividend than the others because the other features are neutral or benefit the investor.
replace a higher, fixed-rate issue with a lower issue after the call date.
Callable preferred stock is advantageous to the issuing company because it allows the company to
except by telephone or text message.
Common shareholders wanting to vote on issues at a shareholder meeting can do so in all of the following ways
greater than 6.10.
If the dollar price of a municipal bond is 101 and the basis is 6.10, the nominal yield is
The limited liability of a limited partner
Nolan Babbage owns several units of the Cray Leasing LP. He is frustrated by the lack of cash flow and begins consulting with the general partners on how best to market the partnership's services. Which of the following features of a limited partnership has he placed in jeopardy?
cumulative preferred stock
Preferred shareholders who expect missed dividend payments to be eventually paid are most likely to own
Which of the following sell transactions is not subject to the holding period restriction specified in SEC Rule 144?
Stock acquired in the OTC market by a corporate affiliate
In book entry.
T-bills are delivered
push bond prices lower in the open market.
The Federal Reserve Bank is raising interest rates, this will
par value, usually $1,000 for a bond
The coupon for a bond is calculated as a percentage of
As short as 1 day or as long as 270 days
The repayment or maturity date of a banker's acceptance is normally which of the following?
apply to the Financial Industry Regulatory Authority (FINRA).
To obtain a Statement of Additional Information (SAI) regarding a particular mutual fund, an investor could do any of the following except
long call and short call
Which of the following contracts are in the money if the strike price is 30 and the market price is 40?
Fixed Annuity
Your client has $50,000 to invest. His objective is a lifetime monthly income that he can receive after he retires. Part of his customer profile stresses that he has had uncomfortable experiences in the past with the stock market and is not inclined to invest in anything that is subject to market fluctuations, opting for principal protection instead. Based on the client's profile, which of the following would be the best recommendation?
All of the following actions must be completed before a customer enters the first option order except ,
completion of (signing of) the options agreement. Customers do not have to complete (sign) the options agreement before entering an order, although under the rules, the agreement must be signed and returned by the customer within 15 calendar days of account approval.
