Stock

STRIPS

STRIPS are Treasury bonds with the coupons removed. STRIPS do not make regular interest payments. Instead, they are sold at a deep discount and mature at par value.

Cash settlements and dividends

A cash trade settles the same day. Stocks bought for cash on the record date will be entitled to the dividend under an exception to the 2-business day rule for regular way transactions.

T Bills

All Treasury securities are issued in book entry form. Treasury bills are always issued at a discount and are never callable.Treasury bills are issued at a discount and pay all interest at maturity.

GNMA

GNMA is a government-owned corporation who approves private lending institutions such as banks and mortgage companies to originate eligible loans, pool them into securities and sell the GNMA mortgage-backed securities to investors. GNMA does not originate loans nor does it issue or sell securities.

Rights of common stockholders

Ownership of common stock allows shareholders the right to vote on the important affairs in the life of the company, not routine operational decisions. No promise is offered with regard to the stockholder's initial investment, which might be lost, or dividends, which might not be declared.

If a corporation attaches warrants to a new issue of debt securities, which of the following would be a resulting benefit to the corporation?

Reduction of the debt securities' interest rate.

Registrar function

The registrar's function is to ensure that the number of shares outstanding does not exceed the number accounted for on the corporation's books. The transfer agent records the names of stockholders on the corporation's books, cancels old shares, and transfers shares into a new owner's name.

Round Lots

The registrar's function is to ensure that the number of shares outstanding does not exceed the number accounted for on the corporation's books. The transfer agent records the names of stockholders on the corporation's books, cancels old shares, and transfers shares into a new owner's name.

Regular ex dividend

The regular way ex-dividend date is 2 business days before the record date.

Warrants

Usually, a warrant is issued along with a debt instrument, an enhancement that allows the issuer to offer a slightly lower rate of interest. Warrants are generally issued with bond offerings to make the bonds more attractive. Warrants are long-term options to buy stock, and because they are equity securities, warrants, as investments, are considered less safe than bonds.