Unit 1 - Individual Securities - Equities

American Depository Receipts (ADRs)

"Certificates" created by organizations such as banks; represent ownership in stocks of foreign companies that are held in trust by a bank located in the country where the stock is traded.

Rule 144 Control Stock

: Control stock is any security owned by an insider or affiliate (officer, director, or >10% shareholder) of that company. The sale of control stock is subject to volume limitations. Affiliates can sell the greater of: 1% of the outstanding shares, or The average reported weekly trading volume during the preceding four weeks

stock warrant

A certificate that grants the owner the option to buy a given number of shares of stock, usually within a set time period.

Restricted Stock

A grant of stock with restrictions. It cannot be sold until certain conditions are met, most often the lapse of time or meeting a performance goal.

preferred stock

A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.

Which of the following would likely require shareholder approval?

Declaring a dividend Firing the CEO Hiring a new CFO Changing the corporation's name (CORRECT)

Stock Rights

Existing stockholders have the right (preemptive privilege) to purchase newly issued shares in proportion to their holdings.

All of the following are considered securities except

U.S. minted gold coins (correct) common stock of ABC corp. 15 british pound put contracts treasury bonds

which of the following is not a security that an investor would purchase?

common shares of ABC corp. debt issue by ABC corp. Bitcoins (correct) windmill growth fund

Declaration date

date BOD approves a dividend payment

Payable date

dividend disbursing agent sends dividend checks to all stockholders whose name appears on the books as owners as of the record date

Another term for stocks and bonds is

equity and debt

ex-dividend date

ex-date is one business day before record date - stock must be purchase before ex-date to receive dividend

Which of the following securities would likely provide the greatest potential for capital appreciation?

preferred stock U.S. treasury STRIP common stock (CORRECT) convertible bond

ABC corp. has declared a dividend payable next month. The actual ex-dividend date will be declared by

the OTC the NYSE (CORRECT) FINRA the CBOE

Record date

the stockholders of record on the record date receive the dividend distribution

Security

An intangible financial asset that may be bought, sold, or gifted between persons. It may be represented by a paper certificate of held in an electronic record.

Control Stock

Stock acquired by an affiliated person such as officer or director

Two major types of securities

Stocks (equities) and bonds (debt)