commonly missed SIE
Aftermarket Prospectus Delivery Requirements
-For IPOs: 90 days after issue for nonreporting companies with securities quoted on OTCBB or in the pink sheets. 25 days for companies to be listed or Nasdaq securities. -Additional offerings: 40 days for securities quoted on OTCBB or pink. follow on have no requirements
Indenture
A bondholder can find the details regarding the terms and features of her bond from the:
Special Assessment Bonds
A town has started the construction of public sewers. This project is likely paid by a(n):
stop order
A type of order that becomes a market order when a round-lot trades at or through a particular price is called a:
yankee bond
A type of security that is issued in the U.S. by foreign governments and corporations, trades in U.S. markets, and is denominated in U.S. dollars is called a:
dealer
If ABC Brokerage (a broker-dealer) purchases 600 shares of stock from a customer and places the securities into its inventory, it likely acted as a(n):
current yield is more than nominal
If a bond is currently selling for less than par value, then:
file a currency transaction report
If a client has been with a firm for 15 years and just deposited $14,000 in cash, what's the regulatory requirement?
Bond Anticipation Notes (BANs)
Issued to obtain financing for projects that will eventually be financed through the sale of long-term bonds.
preemptive rights
Rights that entitle shareholders to purchase newly issued shares of a corporation's stock, equal in percentage to shares already held, before the stock is offered to outside buyers.
Treasury bonds are:
Subject to federal taxes, but exempt from state taxes
Offering Memorandum
Which of the following is used as the disclosure document for a private placement?
Broker
When a broker-dealer is not acting for its own account but is making securities transactions for the accounts of others, the firm is acting as a(n):
20%
When a stock splits 5 for 4, by what percentage will the price of the stock be reduced?
T+1
When do options trades settle?
serial bond
bonds of a single issue that mature on different dates
municipal bonds are
exempt at the federal level, but may be subject to state taxes
U.S. government agency issues are:
exempt from registration under securities act 1933
corporate bonds are
fully taxable at both the federal and state levels.
treasury note
initial maturities that range from 2 to 10 years taxed at the federal level, but exempt from state and local taxation.
rights of accumulation
investors are able to add up all of their purchases towards meeting a breakpoint. Once a breakpoint is met, the investor's future purchases will be made at the lower sales charge.
cumulative voting
permits shareholders to concentrate their votes for one favored candidate.
regulation T
set by the FRB and requires payment from a customer in two business days following regular-way settlement.
treasury bill
short-term securities that mature in one year or less. always sold at a discount inverse relationship between price and yield
1057.50
A Treasury bond is quoted 105.04 - 105.24. The purchase price that a customer would expect to pay would be:
955.62
A U.S. Treasury bond is selling in the market at 95.18. The dollar value of this bond is:
general obligation bond
A bond that's backed by taxes imposed by a local municipality
sell limit
A client owns stock that's trading at $52.50 and wants to sell her shares, but only if she can sell at $54.00 or higher. She should place which of the following orders?
420 shares at $10.71 per share
A company has declared a 7-for-5 stock split. If an investor owns 300 shares at $15, what will his position be after the split?
debenture
A corporate bond that has no specific collateral backing and is guaranteed by the "full faith and credit" of the issuing corporation is called a(n):
ex date
A corporation will be paying a cash dividend to its shareholders. On what date will the market price of the stock be reduced?
less than 6 3/4
A customer buys a 6 3/4% bond at 101 3/4. The yield-to-maturity on the bond is:
u4
A disciplinary action concerning a registered representative (RR) is reported by the firm through which of the following?
Eurodollar bond
A dollar-denominated bond issued outside the US. These bonds pay principal and interest in US dollars
t bills
A quote of 5.90 - 5.75 is a quote for which of the following securities? because its inverted (higher # first)
2 years
A registered person's FINRA registration has become inactive because her firm is no longer in business. Unless she becomes employed by another member firm, she will be required to requalify by examination after:
deliver cash
A stock index call option is exercised. The writer must:
common stock
All of the following are likely to be found in the portfolio of a money-market fund, EXCEPT:
buy a call
An individual who is short stock and wants protection against an upside move in the market will probably:
5.3%
An investor purchases a 20-year 5.30% bond at par value that will yield 5.75% if called at the first call date in five years. The yield to maturity on the bond is:
stop order
An order that becomes a market order when it sells at or below (or at or above) a particular price is called a:
correspondence
Any written or electronic communication that is sent by a member firm to 25 or fewer retail investors is
dollar cost averaging
Average price of the securities purchased will be more than the average cost of the securities over a long
Class A shares vs Class B shares
Class A shares have a front-end sales charge, while Class B shares have a contingent deferred sales charge A CDSC is deducted only when the investor redeems shares.
opportunity risk
During a period of rising interest rates, an individual who invests in mortgage-backed securities is MOST concerned with:
convertibe
During a period of stable interest rates, which type of preferred stock tends to be the most volatile?
slope up from short to long
During periods of easy money when interest rates are declining, yield curves tend to:
bond prices are rising
For a bond owner, in which of the follow situations is call protection most valuable?
notice of sale
For a competitive offering of municipal bonds, which document notifies potential bidders of the general features of the offering?
issuing corporation
For an Industrial Development Bond (IDB), the primary source that backs the bond is:
leasing corporation
For an Industrial Development Bond (IDB), the primary source that backs the bond is:
90 DAYS
For how long must prospectuses continue to be delivered on an IPO of a company that will not be listed?
dec 1
Foremost Corporation has declared a quarterly dividend of 25 cents payable to stockholders of record on Friday, December 1. The dividend will be paid to all stockholders whose names appear on the record books of Foremost Corporation on:
15 business days
If a temporary hold has been placed on an account, it will expire:
t+2
If an equity option is exercised, when does the stock transaction settle?
45
If an investor buys 1 XYZ Aug 40 put for $5 and also buys 100 shares of XYZ for $40 per share, what's her breakeven point?
limited profit and limited loss
If an investor writes (sells) a covered call, what are the potential profit and loss outcomes?
13 months
In most cases, what's the maximum time an investor is given to meet a letter of intent on a mutual fund purchase?
sell limit @60
Joan owns 100 shares of XYZ, which is currently trading at $57 per share. She wishes to liquidate the position when she can receive $6,000 from the trade. Which of the following orders is the BEST choice to fulfill Joan's intentions?
paid in capital
Money received by a corporation when it sells its stock above its par value is called:
municipal
Official statements are the disclosure documents for what type of bond offering?
3 basis points
One basis point is equal to .01%, or 1/100th of 1%. Therefore, three basis points equals .03%, or 3/100th of 1%. (17530)
Direct Participation Program
Program letting investors participate directly in the cash flow and tax benefits of the underlying investments. Such programs are usually organized as limited partnerships, joint ventures or Sub "S" corporations.
T+1
Regular-way settlement for equity options is normally completed within:
settlement date vs regulation T
Settlement date is the date the two broker-dealers exchange security and money and Regulation T payment date is the date the customers must pay their broker-dealer.
T+2
Settlement for corporate securities is two business days after the trade date, which is also referred to
order types
She should place a limit order to sell, which can only be executed at a specified price or higher. A sell stop and/or sell stop-limit order is placed below a stock's current value and is used to protect the stock in case it falls in value. A buy stop and/or buy stop-limit order is placed above a stock's current value and is used to protect a short position in case it rises in value.
FHLMC (Freddie Mac)
The U.S. government does NOT guarantee the payment of interest and principal for which of the following securities?
total return
The cash flow received from dividends and/or interest, plus any appreciation or depreciation in the value of an investment, is referred to as the:
proxy
The certificate which gives a person other than the stockholder the right to vote is referred to as a:
bond is selling at a premium
The current yield is lower than the nominal yield
trustee
The day-to-day business activities of a unit investment trust (UIT) are the responsibility of the:
syndicator
The person who distributes interest in a DPP is referred to as the:
Tuesday the 5th
The record date for a company's cash dividend is Thursday, October 7. What is the latest date a customer may purchase the stock for regular-way settlement in order to receive this dividend?
A security with a low beta:
Underperforms the market when its gaining and outperforms the market when its losing
A covered call writer can be described as being:
When writing (or selling) the call, the investor is said to be short the call. A covered call writer will currently own the underlying securities, and hence be long the stock.
treasury bonds
Which investment is most subject to inflation risk?
treasury bills
Which of the following always trade at a discount?
price per share decreases
Which of the following best describes what happens after a company executes a stock split?
prime rate
Which of the following choices is NOT a leading economic indicator?
ex date
Which of the following dates represents the first day an investor can purchase a stock and not be entitled to its dividend distribution?
sector fund
Which of the following funds is the LEAST likely to provide income?
fed funds rate
Which of the following is the rate that's charged on overnight loans between commercial banks?
limited partnerships
Which types of investments have historically shown a great deal of sensitivity to regulatory risk?
issuer
Who is responsible for creating the official statement for a municipal bond offering?
transfer agent
Who keeps track of the shareholders of a mutual fund?
1680 shares (35k x 4%) and then (33600/20)
XYZ Mutual Fund, an open-end investment company, has an NAV of $20 and a public offering price of $21.40. The prospectus states that the sales charge for purchases of fund shares of $25,000 through $49,999 is 4%. Approximately how many shares can the customer buy for $35,000?
125 at $96
XYZ company is paying a 25% stock dividend to its common stockholders. If an investor owns 100 shares at $120.00 before the stock dividend, how many shares will the investor own and at what price per share after the dividend is paid?
When warrants are issued
a strike price that's higher than the current market price of the stock (i.e., at a premium).
revenue bond
are backed by the revenue of a municipal project or facility
t bond
backed by the full faith and credit as well as the taxing authority of the U.S. federal government.
Warrants, options, rights
correct ranking of securities from longest to shortest life Rights usually last less than 60 days. Options usually last for nine months or less, although some can exist for three years. Warrants usually have a life span of several years and they can even be perpetual.
statutory voting
each stockholder has one vote per share, per election
treasury bond
issued with maturities of more than 10 years taxed at the federal level, but exempt from state and local taxation.
leading indicators
key economic variables that economists use to predict a new phase of a business cycle
Interpositioning
occurs when a broker-dealer, executing an order for a customer, places another broker-dealer between itself and the market.
regulation D
regulation and exemption for reports and statements required for selling stock to private parties based on the amount of money being raised Can be sold to 35 non accredited investors
regulation SP
requires all broker-dealers, investment companies, and investment advisers registered with the SEC to adopt procedures to protect the privacy of confidential information collected from their clients.
Discretionary accounts require:
written authorization from the customer. In addition, each discretionary order must be approved on the day the order is entered by a manager, partner, or authorized person.
