SIE practice exams
A U.S. government bond quoted at 108.06 - 109.09 has an asking price of
$1,092.81 Bond prices are quoted at $1,000 par in 32nds, with each point worth $10. The ask price (the last price quoted) would be $1,090 + (9/32 X $10) for a price of $1,092.81.
You buy 100 shares of XYZ at $30 a share for a new account. What are the industry's minimum requirements?
$2,000 Minimum deposit is $2,000. The minimum is $2,000 EQ or fully pay.
Find the breakeven price for the stock at expiration in this scenario: A customer buys 1 XYZ Jan 25 put for a premium of $2 and, at the same time, buys 100 shares of XYZ stock for $25 per share.
$27 In this scenario, the investor is purchasing both the stock and a put on the stock. In order to find the breakeven point on the stock at expiration, add the price paid for the stock ($25) to the premium paid ($2) for the put. In this case $25 + $2 = $27
maximum civil and criminal penalties for an individual for insider trading violations are
$5,000,000 and/or 20 years imprisonment. Maximum civil penalties are limited to three times the amount of the gain or loss avoided. Maximum criminal penalties are limited to $5,000,000 and/or 20 years imprisonment.
An investor learns that he inherited a mutual fund that had a NAV of $50 per share on the date of the owner's death. Thirty days after the death of the owner, the NAV is $55. It is now 2 months since the owner died and the NAV is $60. The owner's cost basis was $20. What is the cost basis for the beneficiary?
$50 When a security is inherited, the beneficiary's cost basis is the fair market value (in this case, the NAV) of the security on the day of the deceased's death. This is called a "stepped up" basis.
What is the cost of a March 120 T-Bond call with a premium of .20?
$625 Treasury notes and bonds are quoted in 32nds. Therefore, .20 = 20/32 (.625) of 1% of $100,000 (1 point) or $625.
What is the total premium for the following index option: OEX Oct 750 call @ $9.50?
$950 The correct answer is $950, which is calculated by multiplying the strike price by the contract multiplier. Index options have a contract multiplier of 100. So, multiply the $9.50 strike price by 100 to arrive at $950.
A shareholder owns 200 shares of stock with cumulative voting rights. If there are five vacancies being voted upon, what is the maximum number of votes the shareholder may cast for any one vacancy?
1,000 The number of votes controlled by the shareholder is always calculated using the same formula: number of shares × number of vacancies. Under the cumulative method, the shareholder may allocate those votes among the vacancies in any way he desires. In this example, the investor might choose to concentrate all 1,000 of his votes on one vacancy. Consequently, he would forfeit any vote on the remaining four vacancies.
Which of the following is FALSE regarding a Rule 147 offering?
100% of the proceeds must be invested in the state. Under Rule 147, 80% of the proceeds must be invested in the state.
An individual who has been previously registered with another firm is applying for registration with a new member firm. The new member firm has requested the Form U5 from the applicant. Within how many days must the applicant provide the Form U5 from his previous registration?
2 business days
If an associated person was originally registered in 2019, when is the next time they will be required to do their firm element training?
2019 At a minimum, each member must evaluate and prioritize its training needs and develop a written training plan at least annually. Associated persons must complete their firm element training annually.
An associated person was originally registered in 2013 and it is now 2019. When is the next time the individual would be required to take regulatory element training?
2021 Regulatory element training is due on the second anniversary of original registration and then every 3 years thereafter. The next time this associated person would be required to complete the training is 2021 (2013 + 2 + 3 + 3).
Face amount certificates issue debt certificates that offer predetermined interest rates. The certificates may be purchased by either periodic installments or with a lump-sum payment. These certificates have a maturity of at least
24 months
Face amount certificates issue debt certificates that offer predetermined interest rates. The certificates may be purchased by either periodic installments or with a lump-sum payment. These certificates have a maturity of at least
24 months. Face amount certificates have maturities of at least 24 months.
A background check must be performed within how many days after the Form U4 is filed with FINRA?
30 Days
If a member resigns from an SRO, when will the resignation take effect?
30 days after receipt of formal resignation by the SRO Members can resign from the SRO at any time by addressing a formal resignation to the SRO. The resignation will take effect 30 days after receipt by the SRO as long as all debts due to the SRO have been paid and no complaints or actions are pending against the member.
Your client has not paid for a stock purchase in the allotted time period. According to Regulation T, this account will be frozen for
90 days. Nonpayment of a transaction will cause the account to be frozen for a period of 90 days in accordance with Regulation T laws.
A Series 6 registered representative may take a customer order for all of the following investments EXCEPT
A closed-end bond fund in the secondary market. A Series 6 representative is not licensed to take orders for secondary market securities.
Which of the following distributions is a registered secondary offering?
A family member selling founder's stock along with an add-on offering When an officer of a corporation sells unregistered stock, this is called a registered secondary offering. When a corporation issues additional authorized stock, it is called an add-on offering (APO). When a corporation gives stock to shareholders, it is called a stock dividend. When a corporation separates one of its divisions into its own entity, it is called a spinoff.
An individual has completed a U4 form and is now subject to statutory disqualification. Which of the following reportable events triggered the disqualification?
A felony conviction for driving under the influence (DUI) Certain misdemeanors and all criminal felony "convictions" for a period of 10 years are disqualifying events.
Which of the following signatures does FINRA require on a new account form?
A principal of the broker/dealer
A redeemable security is
A security with no secondary trading. A redeemable security is non-negotiable (i.e., nonmarketable) and must be redeemed by the issuer. UITs, FACs and open-end mutual funds are all examples of redeemable securities.
An order for a security trade that directs the broker to buy or sell "at the market" but only when a certain price level has been reached is known as
A stop order. With a stop order, when the specified price level (trigger) is reached, it is triggered. Then it becomes a live market order, executed immediately at the next price.
According to FINRA Rules on Private Securities Transactions, an associated person entering into a series of private transactions without compensation must provide to the member firm all of the following EXCEPT
A written notice on each transaction in a series. In the case where a series of related transactions without compensation are involved, an associated person needs to provide only a single written notice
ABC Corporation announces that it will be acquiring XYZ Corporation. XYZ shareholders will receive one share of ABC stock for every two shares of XYZ they own. This corporate action is a(n)
Acquisition. An acquisition occurs when one corporation becomes the owner of another corporation by purchasing the latter's shares. The shareholders of the target company may also receive cash. In a merger, two companies join to form a new company and shares of the new company replace the shares of the previous companies. A stock split is a stock distribution of more than 25% of a corporation's outstanding stock, with an accounting adjustment to the par value of the outstanding shares. A stock dividend, in contrast to a cash dividend, is paid by a corporation in shares of stock, preserving cash for future growth.
Passive ETFs are similar to index funds in all of the following ways EXCEPT
Active Management Passive ETFs, like index mutual funds, are passively managed, meaning that the portfolio is static (fixed). The holdings and individual stock weightings rarely change so there is very low portfolio turnover. As a result, both passive ETFs and index funds offer broad diversification at low cost.
A broker/dealer that charges a commission on a securities transaction is acting in the capacity of
Agent An agent (or broker) acts on behalf of a customer and charges a commission. This is in direct contrast to a principal (dealer) acting on its own behalf and charging a markup.
Which of the following does NOT describe the OTC market?
An auction market The OTC is negotiated and competitive, involving dealers and traders processing orders and automatic quotes. Shares of the largest corporations trade OTC. The stock exchange, like the NYSE, is an auction market.
Mutual fund shareholder rights include all of the following EXCEPT
Appointment of the investment adviser. The investment adviser is chosen by the directors. Shareholders vote to approve the investment advisory agreement.
Which of the following industries is LEAST defensive?
Automobile production Auto production is a big-ticket consumer item, and is cyclical, not defensive. In other words, it follows the economic cycle.
Which of the following products might be offered by a cyclical company?
Bulldozers Cyclical companies are those whose business is closely aligned with the economic cycle. In other words, they prosper when the economy is expanding and underperform during economic downturns. Heavy equipment, such as bulldozers, used in the construction industry, is an example of a product offered by a cyclical company. In contrast, noncyclical companies are less responsive to the economic cycle. Consumers still buy toothpaste, bread and tobacco, whether the economy is contracting or expanding.
If a market maker posts a quote of 12.00 - 12.10 [25x10], he is willing to
Buy 2,500 shares at $12.00 and sell 1,000 shares at $12.10. A market maker publishes a bid and ask and stands ready to buy or sell 100 shares at those prices. A quote of 12.00 - 12.10 [25x10] means that the market maker is willing to buy 2,500 shares (or 25x100) at $12.00 and sell 1,000 shares (or 10x100) at $12.10.
A financial institution has a large portfolio of U.S. Treasury notes and is concerned that interest rates are about to increase. Rather than selling off the notes, thereby creating portfolio volatility, the institution could attempt to offset the portfolio's unrealized losses by
Buying T-note puts. If interest rates go up as expected, the T-note portfolio will decline in price. The purchase of T-note puts would offset this unrealized loss, since their value would increase as prices decrease.
Which of the following statements describe a market manipulation practice of painting the tape?
Buying and selling a security among traders to create a high level of activity to influence the price of a stock
Which one of the following statements regarding Coverdell Education Savings Accounts is correct?
Contributions are made with after-tax dollars and grow tax-deferred. Contributions to a Coverdell are made with after-tax dollars and grow tax-deferred. Withdrawals are tax-free when used for qualified education expenses. Contributions are not permitted once the beneficiary turns 18 and the money must be used by age 30 or rolled over to a Coverdell for another qualified family member. Unused funds cannot be rolled into an IRA.
Which type of stock would a person own for the best assurance of receiving dividend income?
Cumulative preferred Cumulative preferred stocks give the best assurance of dividend income because no dividends can be paid to common stockholders if any preferred stock dividends are in arrears (owed).
The organization that provides custody services for securities certificates' safekeeping is known as the
Depository Trust and Clearing Corporation. The Depository Trust and Clearing Corporation (DTCC) is a clearing corporation for clearing and settling transactions but it also provides custody services for securities certificates' safekeeping.
All of the following are characteristics of an Exchange Traded Fund (ETF) EXCEPT
ETFs sell directly to investors. Exchange Traded Funds (ETFs) allow intraday liquidity, and have a very low or no minimum investment requirement. ETFs do not sell individual shares directly to investors and only issue their shares in large blocks.
Triple witching involves the expiration four times a year of all of the following EXCEPT
Equities. Equities don't expire. "Triple witching" is the expiration of options on equities, equity index options, and equity index futures. This occurs four times a year in March, June, September, and December.
An investor can be granted an extension of time by
FINRA and the transacting exchange. Only FINRA and the exchange where the stock was transacted may grant extensions to investors.
Which of the following factors will most likely create reinvestment risk?
Falling interest rates Reinvestment risk is the risk that, upon maturity, if interest rates have fallen, the income produced by the currently available bond yields may be much less.
Regulation T of the Act of 1934 gave the power to establish margin requirements to
Federal Reserve Board. The Federal Reserve Board, a federal agency that controls the amount of money and credit in the economy, has the authority to establish margin requirements.
If an investor cannot specifically identify redeemed shares, IRS assumes that reporting will be on the basis of
First in - first out.
Which of the following is a characteristic of TIPS?
Fluctuating principal TIPS have a CPI-adjusted, fluctuating principal and a fixed interest rate. Because this fixed rate is applied to a fluctuating principal each semiannual interest period, the interest payment fluctuates.
Uniform Termination Notice for Securities Industry Registration is also known as
Form U5 Just as an applicant completes a Form U4 for registration with a FINRA member, registered representatives are terminated by the member firm through the completion of a Form U5, or Uniform Termination Notice for Securities Industry Registration.
A well-known seasoned issuer is issuing securities in an APO. To meet Act of '33 disclosure requirements, the issuer may use a/an
Free-writing prospectus.
In accordance with the Uniform Gifts to Minors Act, a donor may
Give an unlimited amount of cash. There are no restrictions on the amount of cash that may be given to a minor under the Act; however, gift taxes may apply. All gifts are irrevocable.
What is the major difference between an oil and gas limited partnership and a real estate limited partnership?
IDCs IDCs, or intangible drilling costs, are the most beneficial deductions in oil and gas. Depletion, although also a difference, does not typically offer as much financial benefit.
In June, a beneficiary inherited stock from his grandmother. She paid $35 per share in April; fair market value at the time her death was $38 per share. The beneficiary I. Has a cost basis of $35. II. Has a cost basis of $38. III. Has a short-term holding period. IV. Has a long-term holding period.
II and IV The heir received the share at a stepped-up cost basis of fair market value at the time of donor's death. Inherited shares are always long-term, regardless of the deceased's holding period.
If the gross domestic product of one year is compared to the GDP of another year, the comparison would be most valid if it were made
In constant dollars.
Which of the following is a coincident indicator?
Index of industrial production The Index of Industrial Production is coincident; business inventories and machine tool orders are leading. S&P 500 is a leading indicator.
MSRB rules require a registered representative to obtain all of the following information regarding a new client EXCEPT
Investment experience. MSRB rules require a registered representative to obtain information regarding the investor's tax status, investment objectives, and financial background. There is no specific requirement to obtain information concerning the client's investment experience.
A private securities transaction exists when a representative
Is selling away. A private securities transaction, or selling away, exists when a representative is involved in the sale of securities that are not sponsored by the firm.
Shares of stock that have actually been sold to the public are known as
Issued stock
Which of the following is/are true regarding a private securities transaction?
It is a violation of Conduct Rules. Private securities transactions are defined as transactions effected outside the normal business of the member firm and are not recorded on the firm's books and records. This is known as "Selling Away," and is a violation of FINRA Conduct Rules. However, transactions among immediate family members are allowed if the associated member does not receive any compensation. In addition, personal transactions in investment company and variable annuity securities are permitted.
An investor who writes a covered call option is subject to
Limited profit and limited loss. An investor who is long stock establishes a covered write by writing calls on a stock position. The calls are "covered" because the investor owns the underlying security. Writing calls provides income to the investor and creates a partial downside hedge, but limits the investor's potential profit on the stock.
In a custodian account, the responsibility for tax liabilities from dividends, interest income, and capital gains belongs to the
Minor
Which of the following would not be in an equity REIT portfolio?
Mortgage An equity REIT invests in real estate. Mortgage REITs invest in mortgages. Hybrid REITs invest in both.
A bond that sells above par is known as a premium bond. Which of the following statements are true?
Nominal yield is the highest yield. The nominal yield will always be the highest yield on a premium bond. The nominal yield is the same as the coupon rate.
Where do municipals trade?
OTC Municipal bonds trade in the OTC market, which is a negotiated market.
The Fed Funds rate is the interest rate that
One bank charges another for overnight borrowing. The Fed Funds rate is the interest rate the one bank charges another for overnight borrowing. The banks are borrowing Federal Reserve funds in order to maintain the Federal reserve requirement dictated by the Federal Reserve Bank.
Which of the following is the function of the Department of the Treasury?
Oversee the U.S. economic and financial systems The Department of the Treasury oversees the U.S. economic and financial systems. Conducting monetary policy is a function of the Federal Reserve System. Regulating retirement, health and welfare benefit plans is a function of ERISA. Promoting consumer protection is a function of Federal Reserve System.
The lowest yielding CMO tranche is the
PAC The PAC has the lowest prepayment and extension risk, and therefore the lowest yield. The Z-tranche is the riskiest tranche. Consequently, the Z-tranche has the highest potential yield.
Which type of preferred stock would potentially pay dividends in addition to the stated dividend if a company has excess earnings?
Participating preferred Participating preferred allows investors to participate in excess earnings after the company has met its normal interest and dividend obligations. In other words, investors may receive dividends in addition to the stated dividend.
Which of the following accurately describes an ETN?
Principal at maturity is based on an index. Principal at maturity is based on the underlying index at that time. ETNs are unsecured debt; they are backed by the credit of the issuing bank. ETNs have no principal protection. They do not pay periodic interest.
Business Continuity Plans are required to address all of the following EXCEPT
Protecting member profitability. Business Continuity Plans are intended to help members meet obligations to customers during emergencies or significant business disruptions. They are not intended to protect member profitability.
Which of the following activities may a nonregistered person perform?
Provide quotes A nonregistered person may accept unsolicited securities orders and may provide quotes.
What type of risk deals with the possibility of earning a lower yield on a new bond after an existing bond matures?
Reinvestment risk Reinvestment risk occurs when interest rates have fallen and assets must be reinvested at lower rates upon maturity of the bond. The income produced by a subsequently purchased bond in contrast to a currently held bond may be much less.
Domestic and foreign bonds are NOT subject to which one of the following risks?
Repayment Risk
The securities definition of refunding is
Replacing debt securities for other debt securities. Replacing debt securities with other debt securities is known as "refunding." Issuers use refunding to lower their interest costs by replacing high interest debt with lower interest debt.
A customer wishes to pay her son's college tuition using funds from her brokerage account. Her account has a checking account feature. The member firm may withdraw the funds if the customer does which of the following?
Requests in writing a wire transfer of the funds to the college Member firms must have written authorization from a customer to withdraw money from their account. A signed check constitutes written authorization. A member firm can also wire money or otherwise withdraw funds with prior written authorization from the customer.
All the following are considered self-regulatory organizations for the regulation of securities offerings and trading EXCEPT
SEC FINRA, MSRB, and CBOE are all self-regulatory organizations for securities offering and trading. The SEC is not an SRO
Which of the following facts concerning UGMA accounts is incorrect?
Securities are registered in the name of the minor. Securities are registered in the name of the custodian in an UGMA account. Only one custodian and one minor may be named per account. Gifts made to the minor are irrevocable. Margin accounts are not permissible for UGMA accounts.
Which transaction must occur in a margin account?
Short sale of common stock Short sales must be on margin because stock must be borrowed. A short put (obligation to buy) can be covered by cash, so margin is not required. Purchases of bonds or stock can be fully paid.
An asset-backed security is backed by
Short-term loans on credit cards or automobiles. Asset-backed securities are backed by short-term loans on assets other than real estate, such as autos or credit cards.
Which of the following entities regulates "blue sky" laws?
State securities regulators "Blue sky" laws are state-specific. State securities regulators enforce the "blue sky" laws of their individual state.
What are the two types of voting processes used by corporations?
Statutory and cumulative There are two types of voting processes used by corporations: statutory voting and cumulative voting. With statutory voting, shareholders are permitted one vote for each share owned to be voted for each director. With cumulative voting, shareholders can multiply the number of shares owned by the number of directorships and cast the votes in any manner desired.
Which of the following joint accounts is designed specifically for married couples?
Tenancy by the Entirety Tenancy by the Entirety is a type of joint account specifically designed for legally married couples and contains the right of survivorship.
Under FINRA by-laws, which of the following relates to trade practice violations and enforcement?
The Code of Procedure The Code of Procedures deals with trade practice violations. One easy way to remember this is "COP." FINRA, under the Code of Procedures, will conduct investigations and hearings. If a member is found guilty, FINRA can fine, suspend, bar, expel, or impose any other penalty deemed appropriate.
A client wants to discuss the assignment of his short call option on XYZ. The market price is $1.00 out of the money but the market price has been increasing steadily. He asks when he is required to deliver the stock. Which of the following is the correct means of option assignment for his call?
The Options Clearing Corporation decides which broker/dealer will deliver the securities. Then the broker/dealer will assign one of their clients by random selection. The client might not be assigned. The process of assignment for options is random on the part of both the Options Clearing Corporation (OCC and the broker/dealer. When an investor wishes to exercise his option, he notifies the broker/dealer. The broker/dealer notifies the OCC and then the OCC randomly selects a broker/dealer that has an open position to be exercised. That broker/dealer then randomly selects one of their clients to deliver securities to or to buy the securities when assigned a put option. FINRA is not involved.
The Investment Company Act of 1940 requires that most investment companies register with
The SEC. The Act requires investment companies, unless exempt, to register with the SEC.
An adviser representative plans to be paid a commission on the sale of securities that are recommended in addition to the fees paid for advisory services. Which of the following is true?
The adviser must disclose such arrangement to the client prior to giving any investment advice. Due to the inherent conflict of interest, an investment adviser representative must disclose to a prospective client, prior to giving any investment advice, any type of compensation plan that includes both an advisory fee and a commission generated by the sale of securities being recommended.
A firm has a joint account for a married couple. Any request for disbursement from the account, made by either spouse, would require that
The check must be payable to both owners jointly. Any disbursement must be made out jointly, and the check must be sent in both names.
Under which of the following circumstances is a company NOT permitted to restrict or close an account?
The client has sold a security recently purchased that has settled, or the client only has 55% equity in the margin account. There is nothing wrong with a margin account with equity at or above 50%. When it drops below 50%, there is a restriction, and when the equity reaches 25% for a long equity position or 30% for a short sale, then a margin call is demanded. If the purchase of a security has not settled before the sale of the security, there is a restriction.
A convertible preferred is convertible at $20 per share. The stock is currently selling on the market at $120. Which of the following are correct statements is correct?
The common stock must be selling at $24 to be at parity with the preferred stock. The conversion ratio is the par value of the preferred stock divided by the conversion price, or in this case, 1:5. It identifies the number of common shares received upon conversion. The parity price of the common stock is determined by dividing the conversion ratio into the market value of the preferred stock, or 120/5 = $24. It only makes sense to convert at a price above the parity price.
A customer instructs his broker/dealer to purchase 200 shares of Dunham Corporation. Two days after trade date, the customer decides that he no longer wants the shares. Which statement is correct?
The customer has entered into a legally binding contract and is obligated to pay for the stock. On trade date, the terms of the trade are set, and the customer has entered into a legally binding contract.
Which of the following best describes cash settlement?
The customer pays for the securities on trade date.
An investor has some bonds that are callable. She is wondering what the yield on her bonds will be if they are in fact called by the issuer. Which of the following is true regarding this investor's bonds?
The investor would have a yield on the bond based on the call premium at the time that the bond is called. The yield that this investor would realize in the event that the bond was redeemed by the issuer on the next available call date would be the yield-to-call. This yield would be based on the call premium paid by the issuer.
The underwriting agreement is between whom?
The issuer and the managing underwriter The underwriting agreement is between the issuer and the managing underwriter. It is the document that spells out the duties and responsibilities of each party, including who has liability for any unsold shares.
A specialist receives an order to buy XYZ 200 shares 20 stop 19. This means that
The order is triggered at or above 20 and filled at 19 or lower. Buy stop limit order: stop at 20 or above, execute at 19 or below.
Who obtains the CUSIP for a municipal bond issue?
The underwriter
Which of the following is true of the registered persons on inactive status serving in active duty in the U.S. military?
They can continue to earn commissions Registered persons on inactive status due to military service have 90 days to register when they return to employment with their member firm or another member firm. If they do not register within 90 days, their 2-year clock will start, after which, they will need to retake the registration examination. They can earn new or continuing commissions if their firm has arranged for another registered person to handle their accounts. FINRA waives the continuing education requirement for persons serving on active duty.
A registered representative with oral authority from the customer can decide which of the following?
Time and price Time and price are nondiscretionary elements of an order. Quantity, security, and action (buy or sell) require special authority, power of attorney.
When a company splits their stock, who maintains a record of shareholders eligible to receive the additional shares?
Transfer agent The transfer agent is responsible for keeping track of the individuals and entities that own the securities of a company. Among the transfer agent's responsibilities are issuing and cancelling certificates to reflect changes in ownership.
An investor anticipates interest rates will rise sharply over the next 2 years. In this scenario, which investment below would allow the investor to profit with the least amount of risk?
Treasury bills T-Bills are a good hedge against interest rate risk. As the bills mature, the investor can earn higher rates of return by rolling these short-term securities into new bills. Long term maturities have a high degree of volatility in interest rate fluctuation periods and should be treated with some caution.
Which of the following are issued with a specified, fixed rate of interest?
U.S. government bonds and notes Treasury notes and Treasury bonds are issued with specified or fixed interest rates. Treasury bills are dependent on the amount purchased, as they are always purchased at discount. T-Notes and T-Bonds can be purchased at a discount and/or a premium.
Which type of investment companies do NOT charge a management fee?
Unit investment trusts The portfolio of a unit investment trust is fixed and does not require an investment adviser. The portfolio is supervised, not managed.
A debenture is an example of a
Unsecured bond. Debentures are corporate issues of unsecured debt; they are backed only by the good faith of the issuer.
An options spread with the same expiration but different strike prices is called a
Vertical spread. A vertical spread is an options contract with the same expiration, but different strike prices. A horizontal or calendar spread is a contract on the same type of option, either puts or calls, with the same strike price on the same underlying security. The only difference is the expiration date. The buyer believes that there will be little volatility in the underlying stock. A straddle is a call and a put on the same underlying security with the same strike price and the same expiration date.
Which of the following is the highest yield when a bond is trading at a discount?
Yield-to-maturity Since the yield-to-maturity represents the overall yield received on a bond, it is the highest yield on a discount bond. The calculation incorporates the coupon rate plus the par value received at maturity, which is greater than the discounted price paid.
