Unit 2 - QBank Review
4
An affiliate holding unregistered shares can sell under Rule 144 ______ times a year.
penny stock
A _____________ ______________ is a non-Nasdaq listed (therefore, Bulletin Board or "OTC Pink") stock trading under $5 per share. If a stock is listed on an exchange or listed on Nasdaq, it is not a penny stock, regardless of price.
accrued taxes secured bondholders
A corporate bankruptcy liquidation took place. Of the following—general creditors, secured bondholders, subordinated debenture holders, accrued taxes—who was paid first and who was paid last?
ETFs
A prospectus must be delivered to customers following a transaction in all of the following EXCEPT
debenture
A written promise made by a corporation to pay the principal at its due date and interest on a regular basis on one of its debt issues but backed by no physical assets or titles to assets
rise
Bonds with put features are likely to be put back to the issuer when interest rates ___________.
Negotiable CDs
CDs that can be traded in the secondary market - these are the only types that are considered money market instruments
- BOD - authorizing to issue more common stock - dividend payment - dividend size - day to day business decisions
Common stockholders can vote on: 1 2 Common stockholders can never vote on: 1 2 3
T-bonds, T-notes, T-bills
List treasury securities from the longest to shortest maturities: 1 2 3
fixed income
Money market instruments are _________ __________ securities with short-term maturities, typically one year or less.
premiums
Options Clearing Corporation (OCC) sets standard exercise prices and expiration dates for all listed options, but the ___________ that buyers pay are determined by the ____________.
owners common and preferred
Persons who own stock in a company are considered _____________ ; thus, both __________ and ____________ shareholders have ownership (equity) in a corporation.
registered
REITS must be ___________ with the SEC.
dividends, gains, losses
REITS pay __________ and pass __________ through to investors but not ____________
OCC
The _________ guarantees the performance of listed option contracts.
A bond with a coupon rate of 7.5% pays $75 of interest annually. Current yield = annual interest amount divided by bond market price So: $75 / $1,055 = 7.109%, or approximately 7.1%.
The current yield on a bond with a coupon (nominal) rate of 7.5% currently selling at 105-½ is approximately:
current, nominal, YTM
Three types of yields type of yield that is set at the time of issuance and is fixed - also 2 other names for this yield
par value
Treasury STRIPS, receipts, bills, notes and bonds all mature at __________ ____________
annually discount
Treasury receipts: interest paid ______________ Sold at a ___________
at least 3 penny stock purchases
Under penny stock rules, what is required for a broker-dealer to consider an investor an established customer?
1
Under the provisions of Rule 144, what percentage of outstanding stock may a control person sell every 90 days?
exempt non-exempt
Unsolicited transactions (those not recommended by the broker-dealer or registered representative) are ________________from the penny stock rules. Solicited transactions are ____________, and the rules therefore apply.
municipal revenue bonds municipal GO bonds
_______ Bonds: -do not require voter approval - not backed by property taxes - not subject to statutory debt limits _________ Bonds: - voter approval required - backed by property taxes - debt ceiling or limit imposed - because backed by taxes
treasury STRIPS corporate bonds, treasury bonds, and treasury notes
________ ___________ - have coupons removed and do not make regular interest payments ______ ________, _________ ______, and _________ _________ pay interest on a semi-annual basis
common shareholders
__________ ____________ have the right to sell or give away their shares without permission of the corporation.
selling securities, unchanged
__________ ____________ out of the portfolio, whether for a gain or a loss, simply replaces the securities with an equivalent amount of cash, leaving the NAV per share ____________.
ETPs
___________ - priced so that the value of the product is derived from other investment instruments, such as a commodity, a currency, a share price or an interest rate - benchmarked to stocks, commodities or indices - marginable and may be sold short
call
a _______ feature on a bond allows an issuer to call in a bond before maturity at times that will benefit the issuer
american-style option
a call or put that can be exercised before expiration
adjustment bonds
a company reorganizing debt from bankruptcy is likely to issue which type of bonds?
Reverse Repurchase Agreement
a dealer agrees to buy securities from an investor and sell them back later at a higher price purchase first, sells later at a higher price
adjustment bond
an income bond is also called an ________ ____________ and is used when a company is reorganizing. the bond is unsecured.
FINRA
an investor cannot obtain a statement of additional info by applying to ___________
9 months
commercial paper is unsecured debt with a maximum maturity of ______ _________
closed-ended investment company
company where the source of profit is investments, rather than selling a product or service. Shares are traded in the secondary markets, while the others offer only redeemable securities.
guaranteed debt
debt backed by another company, such as a parent company
common and preferred stock
examples of equity securities
liquidation
means that property will be taken and sold to repay all debts.
random-selection basis
method used to assign exercise notices to broker-dealers with short positions by Options Clearing Corporation (OCC)
municipal revenue bonds
municipal bonds that are self-supporting because principal and interest payments are made exclusively from revenues generated by the project for which the debt was issued, such as a water and sewer facility billing the municipalities' customers for usage each month.
fees
no-load shares do not have ________ associated with sales and redemptions
GNMA
organization that is backed by the full faith and good credit of the US government
strike price + premium
parity is when the underlying stock trades at the _________ __________ + ____________
business risk
portfolio diversifying is used to reduce ___________ risk
Participating Preferred Stock
preferred shares that allow for the possibility of receiving more than just the stated dividend
commerical paper corporations
promissory notes are a form of ___________ ____________ issued by __________
money market instruments
reverse repurchase agreements and repurchase agreements are _______ _________ _________ (short-term)
sovereign risk
risk that a country will default on it's commercial debt obligations
outstanding bonds and mortgage debt unsecured taxes equity
secured corporate debt includes ______ ________ and _______ _______________. debt owed to suppliers is _________ debt owed to the federal government = _________ preferred and common stock is ___________
common stock
securities that carries the greatest amount of risk in conjunction with a corporate liquidation
repurchase agreements (repos)
short-term sales of government securities with an agreement to repurchase the securities at a higher price sells first, purchases later at a higher price
federal funds
the amount by which a bank exceeds its required deposits to be held on reserve at the FRB
coupon
the annual rate of interest payable on a bond
t bill
the rate on adjustable preferred stock is indexed to the __________ ________ rate
common stock
the underlying asset that is used to create an ADR
collateral trust bonds
type of debt security when a corporation issues debt securities backed by the shares of another corporation that it owns