SIE

For preferred shares, the annual dividend payment is A)fixed and stated as a percentage of its par value. B)subject to variation and stated as a percentage of its par value. C)subject to variation and stated as a percentage of its current market value (CMV). D)fixed and stated as a percentage of its current market value (CMV).

A)fixed and stated as a percentage of its par value.

ABC stock is quoted at 25.20 bid- ask 25.22 5 x 12. The spread is a. $0.02 b $0.25 c. $0.20 d. $0.12

A. $0.02 The difference between the bid and the ask is two cents

In 2016, RST Corporation had both common stock and $100 par value 4% noncumulative preferred stock outstanding. The preferred, like the common stock, pays dividends on a quarterly basis. Because of financial difficulties, the company stopped paying dividends after 2016. After resolving its problem in 2020, the company resumed dividend payments in 2021. Before payin the first quarterly stock dividend that year, the company would have to pay a quarterly dividend to the preferred stockholders of a. $1 b. $4 c. $17 d. $20

A. $1 In the case of a noncumulative preferred stock, skipped dividends are forever lost. So, when the company is able to pay a dividend, as is always the case, it must pay to the current preferred dividend before paying to common shares. The question states that dividends are paid quarterly. Therefore, the quarterly dividend on a stock paying $4 annually would be $1 - an amount that must be paid before the quarterly common dividend can be paid

The purchase of an equity option settles ____; the exercise of an equity option settles ___. a. T+1, T+2 b. T+2, T+1 c. same day, T+1 d. T+2, T+3

A. T+1, T+2 All option trades settle next day. The exercise of an equity option must be completed two days after exercise instructions are issued.

Another term for stocks and bonds is a. equity and debt b. shares and units c. voting and nonvoting d. taxable and tax free

A. equity and debt Equity is a common term for securities that represent ownership interest, such as stocks. Bonds are the most common type of debt security

American Depositary Receipts (ADRs) for a French corporation would be denominated in which of the following currencies? A)A basket of currencies B)U.S. dollars C)Chinese yuan D)Euros

B)U.S. dollars The "A" stands for American. The purpose of these instruments is to trade in the U.S. markets. They are issued in the United States and are denominated in U.S. dollars.

ABC stock is currently trading at $63. Julia Miller would like to purchase ABC stock, but not at $63. If the price of ABC stock were to fall to $58 or less, then Miller wants to buy the stock. Which type of order should Miller place considering her objective. A. Market order B. Buy limit C. Buy stop D. Buy stop limit

B. Buy limit While market orders are always executed immediately at the current market price, limit orders can only be executed at the limit price designated by the customer or better. For a buy limit order, or better means at the limit price or lower. Miller should place a buy limit order at $58.

All of the following are true for ADRs except a. ADRs are U.S. issued securities b. ADRs pay dividends in U.S. dollars c. ADRs are not subject to currency risk d. ADRs represent a foreign security in the domestic market

C. ADRs are no subject to currency risk ADRs are still subject to currency risk, as the underlying security is still a foreign security, and dividends are generated in the foreign currency but are not converted into U.S. dollars by the depositary bank.

Which of the following may purchase an IPO at the POP? a. Jim, a registered representative for Seacoast Securities b. Jim's brother Robert, a contractor c. Jim's niece Amber, a chef d. Jim's father Roy, a retired engineer

C. Jim's niece Amber, a chef Jim, an employee of a BD, is a prohibited person, as are his spouse, parents, siblings, and various in laws. Aunts and uncles are not on the prohibited list, nor are nieces and nephews

Seabird Airlines is selling shares to the public for the first time. The company intends to use the proceeds from the sale of its stock to purchase several new passenger aircraft. This offering is an example of a. a secondary offering. b. a rights offering. c. an initial public offering. d. a subsequent primary offering.

C. an intial public offering This is the first time this company has made its stock available to the public, so this is an IPO

Under the intrastate offering rule (RULE 147), when may a resident purchaser of securities resell them to a nonresident? a. Three months after the first sale made in that state b. six months after the last sale made in the state c. at least six months after the date of purchase d. none of these

C. at least six months after the date of purchase In an intrastate offering, a purchaser of the issue may not sell the securities to a resident of another state for at least six months from the date of purchase

Bao Chiang executes a trade to purchase 100 shares of ABC corporation common in her cash account on Thursday, June 30. Cash must be in her account sufficient to pay for the trade by the close of business on a. July 1 b. July 2 c. July 4 d. July 5

D. July 5 Regular way settlement for corporate securities is two business days. The ssecond business day following Thursday, June 30, is Tuesday, July 5. Saturday and Sunday are not business days and July 4th is a holiday.

Under Rule 144, which of the following sales are subject to volume limitations on the number of shares sold? I. Control person selling registered stock held for one year II. Control person selling restricted stock held for two years III. Nonaffiliate selling registered stock held for one month IV. Nonaffiliate selling restricted stock held for more than six months a. I and II b. I and III c. I and IV d. III and IV

a. I and II control persons (insiders) are always subject to volume limitations. Nonaffiliates have no volume (or any other) restrictions in the sale of registered stock. If the shares are restricted, the volume limits for nonaffiliates end after six months. Registered shares sold by nonaffiliates have no form 144 filing requirements.

Which of the following statements regarding the third market is true? a. It is composed of listed securities traded OTC. b. It is composed only of unlisted securities. c. the services of a brokerage firm are not used. d. It refers to the block trading of unlisted securities.

a. It is composed of listed securities traded OTC. The third market is composed of OTC market makers that deal in and provide liquidity for exchange-listed stocks. Though most of the trading of listed stocks takes place on the exchanges they are listed on, there is no rule that prevents OTC market makers from providing liquidity for these stocks as well.

What federal law regulates the initial sale of securities to the public? a. The securities act of 1933 b. The securities exchange act of 1934 c. The investment company act of 1940 d. The truth in investing act

a. The securities act of 1933

During the cooling-off period, underwriters may do all of the following except: a. gather binding indications of interest b. distribute red herrings to interested parties c. perform due diligence d. file required forms for state registration

a. gather binding indications of interest There are no binding indications of interest. Indication of interest are nonbinding. All the other functions mentioned are allowed during the cooling off period, as are nonbinding indications of interest

Which of the following is not considered a risk of owning common stock? a. the shares are transferable b. the shares have a guaranteed value c. stocks generate a guaranteed income d. stocks have a high priority if the corporation dissolves

a. the shares are transferable Stocks are freely transferable; this is a benefit of stocks, not a risk. Stocks neither have a guaranteed value nor produce a guaranteed income. Equities have the lowest priority in liquidation.

Big Company, Inc., an NYSE listed manufacturer of large objects, has declared a 50-cent-per-share-dividend payable next month. Big Company also has options available for trade. The actual ex-dividend date will be declared by a. The OTC b. The NYSE c. FINRA d. The CBOE

b. The NYSE Ex-dates are set by the marker center where trades will likely take place. In the case of an NYSE-listed stock, the NYSE will determine the ex-date. The fact that Big Company has listed options is not relevant to the question

When a broker dealer maintains an inventory in particular stock and trades that stock in the OTC market, it is acting as a. an agent b. a market maker c. a broker d. an underwriter

b. a market maker A market maker is a dealer in the OTC market that maintains an inventory in a stock and provides liquidity for customers seeking to buy or sell the security.

A large-volume transaction for an institutional investor has occurred on an alternative trading system or network. Entered anonymously, the general public will see no information regarding the volume, price, or who the institutional investor was. This transaction scenario is generally referred to as having occurred a. on a U.S. exchanged b. in a dark pool c. in the over-the-counter market d. in the third market

b. in a dark pool Dark pools are designed to help institutional traders operate in a less-transparent setting than the exchanges (sometimes called lit market in contrast to dark pools). This allows the institutions to trade with less disruption of the secondary markets. It also helps these institutional money manager make it more difficult to determine the strategies they are using.

For this election cycle, Big Trucks, Inc., has three open board seats. Big Trucks operates under a cumulative voting system. Your customer owns 300 participating preferred shares of Big Trucks. He has A. 900 votes he can divide anyway he wants among the three seats. B. no voting rights. C. 300 votes each for the open seats. D. 300 votes total to spread among the three open seats.

b. no voting rights Your customer owns preferred stock. Preferred stock carries no voting rights

BigCo is currently quoted bid 32 ask 32.5 10x12. Your customer be able to buy a. 1,000 shares at $32/share b. 1,200 shares at $32/share c. 1,200 shares at $32.50/share d. 1,000 shares at $32.50/share

c. 1,2000 shares at $32/share Customers buy at the ask (32.5) and there are 1,200 shares available at that price (12x100)

Your client holds ADRs of Daikon Motors, Inc., an automobile manufacturer based in Asia. All of the following are true about the position except A. they will receive dividends in U.S. dollars. B. the security may be traded in U.S. markets. C. they have the same voting rights as an owner of the common stock. D. they have the right to request the underlying common shares be issued to them directly.

c. They have the same voting rights as an owner of the common stock It is important to remember that ADRs are issued by a depository bank and the bank is the registered owner of the shares. Depository banks are not required to pass voting proxies through to the ADR holders

Which of the following securities would likely provide the greatest potential for capital appreciation a. a preferred stock b. a U.S treasury STRIPS c. a common stock d. a corporate bond

c. a common stock Common stocks would be the most suitable for investors seeking capital appreciation. Bonds and preferred stocks are better suited for conservative investors because each is primarily an income investment and has limited growth prospects .

The SEC regulates the trading of all of the following except a. the New York Stock Exchange b. the Chicago Board of Options exchange c. the London Stock Exchange d. the over-the-counter market

c. the London Stock Exchange The SEC is a U.S. government regulator of securities. The London Stock Exchange is located in London England, the United Kingdom.

Which of the following would most likely require shareholder approval? a. declaring a dividend b. firing a CEO c. hiring a new CFO d. changing the corporation's name

d. changing the corporation's name Changing the corporation's name is a significant matter that will likely need shareholder approval. Declaring a dividend and the hiring and firing of senior executives is well within the board's power

All of the followin are true for designated market maker except a. they are members of the exchange b. they are charged with maintaining a fair and orderly market c. they maintain an inventory of the assigned stock d. they guarantee the customer will get a profitable trade

d. they guarantee the customer will get a profitable trade Nobody can guarantee a profit in securities trading. A DMM is an exchange member that maintains an inventory in a stock, provides liquidity, and is responsible for maintaining a fair and orderly market in its assigned securities

How many primary offerings can a corporation issue? a. one primary offering b. two primary offerings c. three primary offerings d. unlimited

d. unlimited A corporation can sell as many shares, and have as many offering, as it can get people to buy the stock