SIE Chapter 1
For this election, big trucks has 3 open board seats. Big trucks operates under a cumulative voting system. Your customer owns 300 participating preferred shares. He has: 1. 300 votes each each open seat 2. no voting rights 3. 300 votes to spread among the 3 seats 4 900 votes to divide any way he wants
2: No voting rights (this is preferred stock)
Under Rule 144, which of these sales are subject to volume limitations on the number of shares sold? 1. control person selling registered stock held for 1 year 2. Control persons selling restricted stock held for 2 years 3. Non affiliate selling registered stock held for 1 month 4. Non affiliate selling registered stock held for more than 6 months A: 1 &2 B: 2 &3 C 3 & 4 D: 1 &4
A: 1 &2
The US Supreme court decision that provided our current definition of a security A: SEC vs. Howey B: Hawkins vs. Florida C: County of San Fran vs. State of CA D: SEC vs. Lorenzo
A: SEC vs. Howey
All of the following are considered securities except A: US minted gold coins B: common stock of XYZ C: 15 british pound put contracts D: treasury bonds
A: U.S. minted gold coins
Another term for Stocks and Bonds A: equity and debt B: shares and units C: voting and nonvoting D: taxable and tax-free
A: equity and debt
Your customer, MJ, has a strong preference for investing in equity securities; however she is hoping to increase the amount of current income her portfolio generates. Which is the least suitable for her. A: Buymore inc. big-box retailer with a long B: Duratech common stock, an exciting new tach manufacturer C: Long Beach Electric, a utility D: Generic Motors inc, 4 3/4% preferred stock
B: Duratech common stock, and exciting new tech manufacturer (new fast growing tech companies tend to pay little or no dividends.)
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 Ex-dividend will be declared by A: the CBOE B: the NYSE C: the OTC D: the FINRA
B: NYSE (if listed, it is the NYSE, if not listed, it is by FINRA)
All of the following are examples of securities except A: Treasury Bonds B: U.S Minted gold coins C: common stock of XYZ corp D: 15 British pound put contracts
B: U.S Minted gold coins
Squidco is issuing 100 million dollars in 4 1/2 % bonds maturing in 20 years. when purchased at issue, the buyers will receive an additional security that allows them to purchase 20 shares of common stock at $50 a share, anytime in the next 10 years. Squidico is trading at $30. What is this an example of? A: call B: warrant C: stock Right D: follow-on offering
B: warrant
which of the following is NOT a security that an investor would purchase A: common shares of ABC pertroleum B: Debt issue by ABC petroleum C: Bitcoin D: Windmill growth fund
Bitcoin
American Liquidators corp (ticker LQTD) has 100 million outstanding common shares. the compant would like to raise capital by selling 100 million new shares. In order to accomplish this, the would A: offer warrants to existing shareholders B: suggest that existing shareholders go to the market and double their position C: offer stock rights to existing share holders D: Perform a stock split
C: Offer stock rights to existing shareholders
All of the following are true regarding penny stocks, except A: established customers of the firm do not need to sign a suitability statement B: if an account holds penny stocks, Broker/dealers must provide a monthly account statement to the customer C: penny stock rules apply to both solicited and unsolicited transactions D: the SEC rules require that prospects, before their initial transaction in a penny stock, be given a copy of a risk disclosure document.
C: Penny stock rules apply to both solicited and unsolicited transactions (False - only apply to solicited)
Which of these securities would likely provide the greatest potential for capital appreciate? A: a convertible bond B: A U.S. Treasury STRIP C: A common stock D: A Preferred stock
C: a common stock
An American Depository Receipt is a A: foreign security representing a domestic security in foreign markets B: foreign security trading in U.S. markets C: domestic security representing a foreign security un U.S. markets D: domestic security trading in foreign markets
C: domestic security representing a foreign security in U.S. markets
All of these dates are declared by the board of directors of a corporation except the A: payable date B: record date C: ex-dividend date D: declaration date
C: ex-dividend rate
Your client holds ADR's of Daikon Motors, an automobile manufacturer based in Asia. All are true except A: they will receive dividends in U.S dollars B: 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 common stock D: the security may be sold in U.S Markets
C: they have the same voting rights as an owner of common stock
Your client holds ADRs of Daikon motors Inc. an automobile manufacturer in Asia. All of the following is true about the position except: A: they will receive dividends in US dollars B: the security may be traded in US markets C: they have the same voting rights as owners of 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 common stock
In 2011, RST Corp had both common stock and $100 Par Value 4% noncumulative preferred stock outstanding. Stock is paid on a quarterly basis. Due to financial difficulties, dividends cease for 5 years and are resumed in 2016. before paying the first quarterly common stock dividend, the company must pay a quarterly dividend to the preferred stockholders of? A: $17 B: $20 C: $4 D: $1
D: $1 (This Answer is quarterly!! and NONcumulative)
which of these would most likely require shareholder approval? A: firing the CEO B: Hiring a new CFO C: Declaring a dividend D: changing the corporations name
D: Changing the corporations name
Mary owns 8% of Doyle Inc. a publically traded publishing company. She recently married john who owns 3% of Doyle. John wants to sell some of his shares to pay off the debt from the wedding. When he does he will need to A: not file form 144 due to the spousal exception B: not file form 144 because he only owns 3% of Doyle C: file form 144 because he is a doctor D: file Form 144 because he is a control person
D: File form 144 because he is a control person
Equity is to debt as A: stock is to preferred stock B: hedge fund is to mutual fund C: stock is to mutual fund D: Stock is to bond
D: Stock is to Bond
Jon owns 100 shares of the Bayside Fishing company. bayside has 1,000,000 shares outstanding and operates under a statutory voting system. At the next election for the board, there are two open seats. A: Jon has control of 200 votes, and he can cast up to 100 of those votes for each for each open seat B: Jon owns 1/10000 of the bayside fishing company C: Jon has control of 200 votes, which he can cast any way he likes among the two open seats D: Jon has a right to freely transfer his shares
Jon has control of 200 votes, and he can cast up to 100 of those votes for each for each open sea
Included under the term, equity would be A: debentures B: collateral trust certificates C: participating preferred D: equipment trust certificates
Participating Preferred
