SIE- Unit 1
Which of the following would be applicable to nonexempt securities (those that must be registered) being offered to the public by a corporate issuer? i. Securities Act of 1933 ii. Prospectus iii. Securities Act of 1934 iv. Secondary market
I and II
Your customer buys 300 shares of Steel Tools common stock on Tuesday and will be an owner of record as of the close of business that same Tuesday. This must be
a cash settlement trade.
An investor receives a quote of 22-22.15 for BuyStuff, Inc. common stock. Which of these is correct? i. Purchasing the stock will cost $22 per share. ii. Purchasing the stock will cost $22.15 per share. iii. The spread is $0.15. iv. The investor will receive $22.15 per share if selling.
II and III
Which of the following best describes a final prospectus?
Meets the full and fair disclosure requirements of the Securities Act of 1933
An order that when triggered becomes a market order is called a
stop order.
For a new issue that qualifies for Nasdaq listing, a prospectus must be provided to all purchasers within how many days after the effective date?
25 Days
For a new issue that qualifies for listing on an exchange, a prospectus must be provided to all purchasers for how many days after the effective date?
25 days
A quote for Seabird Airlines (SBRD) is 17 B 17 ½ A 5 x 5. A customer would be able to sell how many shares and at what price?
500 shares at $17 a share
An investor has her registered representative enter a sell stop limit order at 50. Following the order entry, trades occur at 52, 50, 49, 51, and 53. The investor would receive
51
How long can a good 'til canceled order remain in force without being reconfirmed by the customer?
6 months
Which of the following is not an exempt issuer?
A National Bank Holding Company
Your customer purchases shares of a common stock of a major exchange in a trade that settles the same day. This is an example of which type of trade?
A cash settlement trade
All of the following are securities that are exempt from registration except
BigCity National Bank Holding Company, Inc., common stock.
Seacoast Securities, a broker-dealer, maintains an inventory in DEF, Inc., common stock. When transacting business in DEF stock, Seacoast is most likely acting in what capacity?
Broker
Which of the following is not an exempt issuer?
National Bank Holding Company
A final prospectus must include certain information. Which of the following is not required to be included?
The underwriting contract and a list of all underwriters named in the contract
Each of the following may be traded on an exchange except
life insurance.
An investor with no other positions in LMN stock purchases 400 shares at the market. This investor is
long LMN stock and bullish.
Isaac James has some call options in his account that he would like to exercise. He wants to know when the resulting purchase of the stock would settle. You would tell him
trade date plus 2 business days.
Your client, Teresa Jenson, calls and wants to purchase T-bills and wants to know when payment is due. You should tell her
trade date plus 2 business days.
Which of the following calls for the underwriters to buy securities from the issuer acting as an agent, not as principal?
Best efforts underwriting
An underwriting group is currently assisting an issuer with the preparation and filing of the registration statement for a new issue. Who is responsible for the accuracy of the information within the registration statement?
Both the underwriters and the issuing corporation
Your customer notes the amount of commission they paid your broker-dealer firm for their purchase of 500 shares of DEF, Inc., common stock. On this trade your firm most likely acted in what capacity?
Broker
Caleb McCann got a tip from his brother Nate on XYZ stock two months ago. Caleb hasn't previously been investing in the stock market but has been watching this stock since he got the tip from his brother. Caleb is now very bullish on XYZ and wants to place a trade. Which of the following would you recommend?
Buy XYZ to open a long position
A prospectus displays which of the following?
Description of how the proceeds will be used
Which of the following is not a characterization of the Securities Act of 1933?
Exchange Act
BigBox Stores, Inc., common stock is a New York Stock Exchange-listed security. If an over-the-counter dealer makes a market in the stock, this activity is taking place in which market center?
Exchanges
Which of these statements is true regarding shelf offerings?
For securities offered via a shelf registration, a supplemental prospectus must be filed with the SEC before each sale.
An individual who purchases securities for a personal account is called
a retail investor.
An investor with no other positions in LMN stock purchases 600 shares at the market. This investor is
long LMN stock and bullish.
In an underwriting where fixing a minimum dollar amount to be sold in order to move forward with the entire offering is most commonly referred to as
mini-max
In the capital markets, securities such as stocks and bonds can be
purchased and sold by individuals only
A registration statement disclosing material information about a new issue must be filed with the Securities Exchange Commission. The accuracy and adequacy of the registration statement is the responsibility of
the issuer.
The market for Sierra Verde Coffee Company stock is at $72 per share. Your customer would like to sell his shares for $75, and believes the stock will climb to that level in the next two to three weeks. Which order should he place?
Sell limit 75 AON
Which of the following is not required to endorse a stock certificate for transfer?
Signatures of the receiving registered representative
Issuance and trading of securities are regulated at more than one governmental level. These would include regulations at which of the following? i. County level ii. City level iii. Federal level iv. State level
III and IV
Which of the following best describes the size of a quote?
It tells the number of shares the broker-dealer is willing to buy or sell at that price.
Your customer notes that the amount of commission they paid your broker-dealer firm for their purchase of 100 shares of DEF, Inc., common stock is about 1% of the purchase price. On this trade your firm most likely acted in what capacity?
On an agency basis
A customer placed an order to purchase 20 GHI Corp. subordinated bonds at 102. The broker-dealer sourced the bonds from another broker-dealer that maintains an inventory of the bonds. The customer's firm acted as
a dealer.
A customer enters an order for ABC, Inc., common stock that includes instructions that it must be executed in its entirety when entered or canceled. This is known as
a fill-or-kill (FOK) order.
Regarding the sale of a new issue, a customer is considered a restricted person if the person is
a grandparent of an associated person of a member firm.
During the cooling-off period of a new registration filed with the Securities and Exchange Commission (SEC)
a red herring may be given to prospective investors.
When an investor receives a final prospectus, the expectation should be that one of the following would not be found. Which is it?
all known risks to purchasers of the stock
It would be appropriate to refer to any of the following as an issuer transaction except
an REPO.
Public offerings of securities are regulated under
the Securities Act of 1933.
A signature endorsement on a stock certificate would not be required for good delivery if the shares were
held in street name.
A company is already public with several major stockholders. The company proposes an offering where sale proceeds for shares being sold to the investing public will go to some of the existing stockholders who want to divest of their shares as well as to the corporation. This is i. a combination offering. ii. a primary offering. iii. a secondary offering. iv. an initial primary offering (IPO).
II and III
Primary market transactions would include which of the following?
Sale of $10 million of corporate bond by a broker-dealer acting as an underwriter
Your customer opens a position at 45 and then closes it later at 47. This represents
a 2-point gain or loss.
Narcissus, Inc., a social media company, has shares selling at $50. Your customer is bearish. He would like to sell the stock short, but not until it retreats at least 10% from its current price. In order to catch the drop he could
enter a sell short at stop 45.
Raising funds is generally accomplished by corporations through the issuance of stock (equity) or bonds (debt). This is done in
the capital market.
Electronic communication networks (ECNs) are part of
the fourth market
