SIE Unit 1 Quiz

Six days into the cooling-off period, an issuer receives a deficiency letter from the Securities and Exchange Commission (SEC) requesting clarification and corrections. Once the issuer submits these, and assuming that they satisfy the deficiency, the cooling-off period will resume. With no other deficiencies arising, the issue should become effective in A) 8 days. B) 15 days. C) 14 days. D) 20 days.

14 days

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

A customer is given a quote for ABC as: 17.00 - 17.25 6 × 12. This quote indicates the customer can

C) sell 600 shares for $17 per share.

An indication of interest given by an investor during the cooling-off period is

an investor's declaration of potential interest in purchasing some of the issue after the security comes out of registration.

All of the following are acceptable choices to function as a depository and intermediary for transactions between buyers and sellers of securities except A) the Depository Trust Company (DTC). B) carrying firms. C) the National Securities Clearing Corporation (NSCC). D) credit unions.

credit unions.

A closing transaction can be

either a buy or a sell

Regular way settlement for the purchase of an equity option occurs A) three business days after the trade date. B) one business day after the trade date. C) the same business day as the trade date. D) two business days after the trade date.

one business day after the trade date.

Rules to protect the investing public during the public offering process include all of the following except A) limiting the number of shares of an initial public offering (IPO) that may be purchased by the issuing company's employees. B) securities industry insiders may not take advantage of their insider status to gain access to new issues for their own benefit. C) members must offer the securities at the public offering price. D) member firms may not withhold securities in a public offering for their own benefit.

A) limiting the number of shares of an initial public offering (IPO) that may be purchased by the issuing company's employees. No rule limits the number of shares that an issuer can direct to persons who are employees of the issuer.

Which of these may be found in the final prospectus that is not in the preliminary prospectus? Next year's sales Public offer price Release date Planned use of the proceeds

C) II and III Public offer price Release date

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?

C) Sell limit 75 GTC

A corporate stock is purchased on Friday, April 2, regular way. When will the trade settle?

D) Tuesday, April 6

A customer purchased shares of stock into her account. This action is known as

buying long

A company's management team has agreed to issue additional shares of common stock in part to provide an employee stock ownership plan. It is agreed the issuance of the stock is not urgent and can wait until more favorable market conditions exist. What type of registration is most suitable under these conditions?

A shelf registration

Which of the following transactions would take place in the secondary market?

A broker-dealer selling securities out of its inventory to the public

If your client, Marvin Blackwell, places a sell stop order at 38 when ABC is trading at 40, at which of the following prices could the order be filled? 38 39 40 41

D) I, II, III, and IV A sell stop order is an instruction to sell at the market when a trade occurs at or below the stop price. If ABC stock's price drifted down and trades at 38, the stop is triggered. Even if it leaps over 38 to 37.95, for example, the stop would trigger. Remember that a stop, when triggered, becomes a market order. Market orders may fill at any price.

Which of the following is true regarding the primary market? A) It is regulated by the Securities Act of 1934. B) The NYSE is an example of a primary market. C) Price is determined by supply and demand. D) Issuer transactions occur in the primary market.

D) Issuer transactions occur in the primary market.

A company, in order to raise capital for expansion, wants to sell shares of stock to investors. The company's common stock is not currently trading in the secondary market. This offering is known as

D) an initial public offering (IPO).

Distinguishing between a sell stop order and a sell stop limit order, which of the following are true? The sell stop limit order becomes a sell limit once triggered. The sell stop order becomes a sell limit order once triggered. The sell stop limit order becomes an order to sell at the market when triggered. The sell stop order becomes an order to sell at the market when triggered.

I and IV Stop orders become market orders once triggered, and stop limit orders become orders to sell at the specified limit once triggered. Stop or stop limit orders can be either buys or sells.

Your customer, Ellesha, places a sell stop at 50 on DEZ stock while it is trading at $53 per share. After the order is elected, Ellesha may sell her shares at which of the following prices? $48 $49 $50 $51

I, II, III, and IV

Which of the following would take place in the primary market?

Securities sold to the public by the issuer

All of the following names describe the Securities Act of 1933 except

The Exchange Act The Exchange Act is the Securities Exchange Act of 1934 and covers the secondary markets. The Securities Act of 1933 covers the primary market and requires full and fair disclosure on new issues by providing a prospectus to the investor.

Electronic communication networks (ECNs) are part of

The fourth market

Which of the following would not be expected to be found in a tombstone advertisement for a new issue?

The intended purpose for which to use the sales proceeds

The preliminary prospectus for an IPO indicates that the number of shares to be sold may be increased as much as 15% if market demand is sufficient. This is called A) a shelf offering. B) a Green Shoe option. C) an adjustment offering. D) a flexible offering.

a Green Shoe option.

An offering is defined as the sale of a security. Regarding offerings, all of the following are true except

corporate securities can only be offered in public securities offerings. Both stocks and bonds can be made available to the investing public through an offering. Different types of offerings are identified by who is selling the securities—an issuer or another investor. Securities offered by corporations for sale to the investing public are sold to investors through either public or private securities offerings.

A broker-dealer designated as a carrying firm would be expected to do all of the following except

maintain a lower net capital than noncarrying broker-dealers.

The Securities Act of 1933 protects investors who buy new issues by doing all of the following except

requiring the licensing of persons affiliated with broker-dealers.