2.17.22 Quiz corrections

Quick Ratio (Acid Test)

(Current Assets - Inventory) / Current Liabilities. The most stringent test of a corporation's ability to meet its current obligations.

30

According to Regulation T, a new issue may not be purchased on margin for the first _____ calendar days following the public offering date. IPO

Placement Ratio (Bond Buyer Market Indicator)

Measures the Percentage of New Issues that have been sold

amortized

Municipal bonds bought at a premium must be _________.

official statement

The ______________ ____________ is used to disclose all material information about the issuer that an investor would need to know to make a decision regarding issue purchase. such as the issuers financial condition.

buying power

__________________ = 2 x excess equity in a margin account

Principal Capacity

a firm effecting securities transactions for their own account

Dollar Bond Quotes

based on a percentage of face amount (par $1000). example is a quote of 85½ is 85.5% of $1,000, or $855.

Protective Put

if the long position is not more that 12 months old when the __________________ __________________ is purchased, the holdings period is erased.

Revdex

index of yields on 25 revenue bonds with 30 year maturities

30 360

muni bond days per month and year for interest calculation

accreted

muni bonds purchased at a discount must be __________.

not-held

order good for day only, customer gives authority over price and timing of the order.

capital gain of two points.

If a municipal bond with 10 years to maturity is purchased from the issuer for 110, and after two years, it is sold for 110, the bondholder must report

A (under 2k, 100 percent of market value)

If an investor opens a new margin account and buys 100 shares of DWQ at 18, with Regulation T at 50%, what is the investor's initial margin requirement? A) $1,800 B) $3,600 C) $900 D) $2,000

De Minimis Exemption

If the beneficial interests of restricted persons do not exceed 10% of an account, the account may purchase a new equity issue.

100

If the initial transaction is less than $2,000, the investor must deposit _____% of the market value.

dollar for dollar

In a margin account, if marginable securities, stock buys stock ________________ ____________________ ___________________.

30

Pursuant to Regulation T, cash dividends received in a customer's margin account can be withdrawn anytime within the first ________ days of receipt. Otherwise, they become a permanent reduction to the debit balance.

Dollar Bonds

Some municipal revenue bonds are quoted on a percentage of par dollar basis rather than basis. Such bonds are commonly called dollar bonds. Dollar bonds are usually term bonds callable before maturity.

Married Put

The purchase of a put option and the underlying stock on the same day. Special tax rules apply if the put expires, simply considered part of cost of security.

10%

Under the de minimis exemption, an initial public offering of common stock may be sold to an account where restricted persons have a beneficial interest, as long as their interest in the account does not exceed

A (The value of the stock dividend received will be offset by the decline in current market value (CMV) of the long position on which the dividend is paid. The account's long CMV will not change; it will just be represented by more shares. There will be no change in the overall CMV, debit balance, or equity, and therefore no change in the SMA. On the other hand, a cash dividend means that new money is coming into the account, which will reduce the debit balance and be credited to SMA so the customer may withdraw the dividend, if desired.)

Which of the following will not affect special memorandum account (SMA)? A) A stock dividend on stock held long in the account B) A deposit of cash into the account by the customer C) A long sale at a profit D) A cash dividend on stock held long in the account