SIE Exam

Miss Jones purchased a 7% J&J 15 municipal bond on Tuesday, March 18th in a regular way trade. How much accrued interest will she pay?

$12.64 T+2, 30 day months, settlement date 20th, jan feb mar apr may jun = 16+30+19 = 65/180 * .035 * 1000

rule 147

'33 home state (80% of gross revenue, assets, net proceeds used in state) and 100% of investors from state, investors must wait 6 months upon purchasing to sell to out of state residents

affiliate / corporate insider

- officer, BOD, shareholder holding > 10% of outstanding can only sell 1% of outstanding stock or average weekly trading volume over last 4 weeks over 90 days - less than $50,000 no form 144 needed to be filed

rates order low to high for discount bonds

NY CY YTM YTC

leading indicators

bond yields, building permits, manufacturing activity, stock market indices and averages, PPI, layoff rates, average of weekly unemployment insurance claims and business inventories

LOI

can be backdated 90 days, up to 13 months, not legally binding, can hold funds in escrow, allows investor to contribute capital to a mutual fund over time and receive a lower sales charge

regulation S

companies can raise capital overseas

mutual funds expense ratio

operating expenses / average net assets

limit orders

placed by customers who want to achieve a favorable price (ie selling higher or buying lower than current market), can be filled partially

regulation D

private placements, unlimited accredited (institutional investors w/ 5M assets, individuals 200k income avg 2 years 300k married couple or 1M net worth excluding residence, & officers/directors/partners of issuer), max 35 unaccredited

what happens during cooloff period and what is prohibited

20 day period following filing date but before SEC declares the issuance effective allowed: SEC reviews registration statement for adequate disclosures, bankers conduct roadshows, and can solicit IOIs and have investors give nonbinding IOIs prohibited: taking an order, promising a certain amount of issue to customer and taking a check from a customer to purchase the issue

A selling agreement with the issuing company is required for the distribution of which of the following? I. Open end company shares II. Closed-end company shares III. ETFs

A

An investor with no other positions sells an XYZ 82 put at 5. The put is exercised when the stock is trading at 76 and the investor immediately sells the stock at the current market price. What is the investor's profit or loss? A) Loss of $100 B) Profit of $100 C) Loss of $1,100 D) Profit of $1,100

A

If a security is redeemable, A) It can be purchased by the issuer B) It can be sold in the open market C) It is actively managed D) It cannot be purchased from a broker-dealer

A

Which of the following is true regarding redemption of a bond? I. If a bond is called away prior to maturity the investor may receive a call premium. II. If a bond is called away prior to maturity the investor always receives a call premium. III. If a bond is called away prior to maturity the investor receives the final interest upon redemption. IV. If a bond is called away prior to maturity the investor forfeits any interest accrued since the previous coupon payment. A) I and III B) I and IV C) II and III D) II and IV

A

Why are U.S. Treasury Securities used for conducting Open Market Operations? A) Because the market for these securities is the broadest and most active in the U.S. financial markets B) Because they are guaranteed by the federal government C) Because their low interest rates keep the cost of conducting open market operations as low as possible D) Because they are recognized as a global standard of value in the international marketplace.

A

On secondary fixed-income markets, how are most dealers compensated for their marketmaking activities? A) Markups or markdowns B) Commission C) Rebates D) Asset-based fees

A - dominant model for secondary FI trading is bi-lateral principal trades

An investor who wishes to avoid reinvestment risk would be unlikely to purchase a A) 15-year AAA debenture B) 7 -year Treasury Strip C) 60-day commercial paper D) 20-year zero coupon bond

A Debentures provide regular interest payments that will need to be reinvested

Which of the following orders will not be adjusted on the 'ex-dividend 'date? A) Sell limit B) Buy limit C) Sell stop D) Sell stop limit

A Orders entered below the market will be adjusted on the ex-dividend date. Sell limit orders are placed above the current market.

A person who has not been registered for the past three years has now become newly registered with another broker-dealer. With regard to Regulatory Element, this representative I. Must take the appropriate module as if subject to the program for the first time II. Is grandfathered from the Regulatory Element program III. Must complete Regulatory Element annually by December 31st IV. Must complete Regulatory Element every other year by December 31st A) I and III B) I and IV C) II and III D) II and IV

A When an individual has left the securities industry for more than two years, and becomes newly registered and qualified the individual is subject to the Regulatory Element as if entering the program for the first time. The individual would be required to complete the program annually by December 31st. Note that the requirement was changed from within 120 days of the individual's second anniversary of registration and every three years thereafter to annually by December 31st on January 1st, 2023.

A registered representative sends 10 clients a letter recommending that they sell shares of ABC Pharmaceuticals before the company declares bankruptcy. This is based on the rep's own opinion and research, and the firm has not investigated the potential for bankruptcy. Is this a compliance problem? A) Yes, because it violates suitability requirements B) Yes, because it is based on speculation, in the eyes of regulators C) No, because the rep has research to support the recommendation D) No, because the rep is exercising free speech

A Yes because must be firm that does reasonable basis suitability investigation not the individual

When must proxy materials be filed with the SEC? A) In advance of the shareholder solicitation B) Within ten days of posting proxy materials online C) Within five days after the shareholder vote D) There is no requirement to file proxy materials

A must disclose all important facts upon which shareholders are being asked to vote

A customer has instructed his broker that he wishes to write 20 ABC 65 calls to add income and protect his portfolio. The order is to be entered immediately and he will take as many contracts as are available. This order is a A) Market order B) Buy limit order C) Sell limit order D) Stop loss all or none order

A -Market orders instruct the broker to buy or sell the options at the current market price. In this example the customer is selling, and will be writing the 20 calls at the ask price. The advantage of using market orders is that orders are filled quickly (often instantly). Because the order is not designated as an all-or-none order the order may be filled with less than 20 contracts.

Under the Securities Exchange Act of 1934, the Securities and Exchange Commission does all of the following EXCEPT A) regulate the extension of credit by brokers-dealers B) regulate the activities of members of national securities exchanges C) regulate the solicitation of proxies D) provide rules for the segregation of securities owned by clients

A (the FRB does this not SEC)

Which of the following is not a risk to a limited partner in a direct participation program? A) limited liability B) high illiquidity C) tax law changes D) IRS audit

A - limited liability is a benefit not a risk

All client orders must be approved by a supervisor A) Promptly before execution B) Promptly after execution C) Promptly upon receipt D) Within a reasonable time following execution

B

How often is a mutual fund required to send information to their investors on holdings and performance? A) Annually B) Semi-annually C) Quarterly D) Monthly

B

Investors in Roth IRA's may make A) pre-tax contributions and receive tax-free distributions B) after-tax contributions and receive tax-free distributions. C) pre-tax contributions and receive distributions that are only taxed when retirement age is reached. D) after-tax distributions and receive distributions taxed at federal but not state level

B

Jim wants to know if he can take a penalty-free withdrawal from his Traditional IRA at age 50 to pay for his child's college tuition. A) Yes, if the child attends a fouryear college B) Yes, if the expenses are qualified C) Not unless he qualifies for a hardship D) Not if he has other funds available to meet the need

B

Nonagricultural employment is what kind of economic indicator? A) Leading B) Coincident C) Coterminous D) Lagging

B

Shareholders of XYZ Inc. have received a letter advising them of an opportunity to sell their shares back to XYZ at a specified price on a specific date. XYZ Inc. is conducting a A) Leveraged buyout B) Tender offer C) Repurchase agreement D) Wash sale

B

The agreement between a municipal bondholder and the issuer is found in the A) official statement B) indenture C) legal opinion D) notice of sale

B

The most significant expense of a mutual fund is the A) 12b-1 fee B) management fee C) overhead D) sales charge

B

To become fully registered in the securities industry, A) The SIE must be completed with 90 days of joining a brokerdealer. B) The SIE and an appropriate additional exam must be completed. C) A formal interview, application, and the SIE credential all must be completed prior to becoming fully registered. D) A valid fingerprint card must be submitted along with all application fees.

B

Upon signing a loan consent agreement, a customer of a broker-dealer is A) allowing their securities to be used for collateral at a bank in order to secure a margin loan. B) providing consent for their securities to be used to facilitate short sales. C) pledging their securities as collateral for other customers' margin calls. D) allowing their securities to be sold at a time of the brokerdealer's choosing.

B

What is the maximum amount of withdrawal from a Traditional IRA that a first-time homebuyer can take before age 59 ½, without having to pay a 10% penalty? A) $5,000 B) $10,000 C) $15,000 D) There is no maximum

B

Which of the following statements are true concerning stop orders? I. They can limit a loss in a declining stock. II. They become market orders when there is a trade at, or the market passes through, a specific price. III. They are the same as limit orders. IV. They can affect the price of the stock when the specific stop price is reached. A) I and II B) I, II and IV C) I, III and IV D) II and III

B

The Securities Exchange Act of 1934 concerns A) the regulation of investment companies B) trading activities such as short sales, stabilization and the registration of over-the-counter brokers and dealers C) the form and content of the prospectus that must be given to all prospective purchasers of a security D) the registration of persons engaged in the business of advising others about investment company transactions

B '34 regulates the secondary market and trading activities such as short sales, stabilization and registration of OTC broker dealers, '33 concerns prospectus and '40 concerns investment companies

A sell stop order is entered A) above the current market price B) below the current market price C) either above or below the current market price D) at the current market price

B A sell stop order is entered below the current market price to protect a loss in a long position, or is entered in anticipation of a stock breaking below a support level and decreasing significantly in price.

An individual who has knowledge of or access to material nonpublic information about a company is an A) Affiliate of the company B) Insider of the company C) Employee of the company D) Officer of the company

B Affiliate is BOD, C-suite Officer, shareholder > 10% and their stock is called control stock (volume limits)

Which two of the following documents would be considered an advertisement under MSRB rules? I. a dealer offering sheet II. an abstract of an official statement III. a form letter IV. an interoffice memo A) I and II B) II and III C) II and IV D) III and IV

B Materials prepared by dealers and third parties on their behalf that are designed to communicate with the public are considered advertisements. Prelim official statements, official statements and memos for internal use are not for communication with the public.

When a UIT reaches the termination date specified at its creation, the trust A) May be either liquidated or extended as determined by the board of directors of the trust B) Is dissolved and no longer active C) Can refile with the SEC for a subsequent primary offering D) Is sold and proceeds are distributed to unit holders

B Termination date established when the trust is created

A J&J Treasury bond with a 10 1/4% coupon due July 1, 2032, is purchased in a cash transaction with a settlement date of February 24th. What is the number of days of accrued interest? A) 53 B) 54 C) 55 D) 63

B treasury bonds trade using actual days per month in 365 day year and settle T+1 30 days hath september, april, june and november all the rest of 31 except feb that has 28 accrued interest doesn't count settlement date

Government bonds and notes are quoted A) in 1/8ths B) as a percentage of par C) on a yield to maturity D) as a percentage of par on a discounted annualized basis

B Government bonds and notes are quoted as a percentage of par in 32s and government bills are quoted on a discounted yield basis (unlike gov bonds and notes, bids are higher than ask because must be subtracted from face amount aka buyer wants a bigger discount from par and seller wants a lower discount from par)

A no-load fund has a public offer price that is A) higher than its net asset value B) the same as its net asset value C) lower than its net asset value D) discounted to its expense ratio

B (no sales charge assessed on investors)

Which of the following orders must be adjusted accordingly on the ex dividend date? A) "Sell 1,000 shares of XYX at 22.50 GTC" B) "Buy 2,000 shares of ABC at 15.75" C) "Buy 3,000 shares of JKL at 18.25 Do Not Reduce" D) "Buy 1,000 shares of XYZ immediately at the best available price"

B) "Buy 2,000 shares of ABC at 15.75" Buy limit and sell stop orders must be adjusted based on the distribution terms on the ex-dividend date. A client may also provide specific instructions to indicate that their order should not be reduced.

Which of the following statements concerning mutual funds is not correct? A) Both load and no-load funds have expense ratios B) Investors have one year to fulfill their obligation under a letter of intent C) Their net asset value must be determined at least once each business day D) The fund stands ready to issue and redeem shares as necessary

B; investors have 13 months

A bond portfolio will lose value when interest rates rise. This is an example of A) Reinvestment rate risk B) Purchasing power risk C) Interest rate risk D) Credit risk

C

A brokerage firm prints a brochure and leaves it in the lobby for visiting clients to read. This is its only form of distribution. Is it considered retail communication? A) No, it is correspondence B) No, it is for internal use only C) Yes, if more than 25 clients visit the lobby within 30 calendar days D) Yes, if more than 25 clients take the brochure home with them within 30 calendar days

C

A registered rep has been out of the securities industry for 3 years. This person A) must re-take the SIE and topoff exam in order to return to the securities industry. B) must re-take the top-off exam within two years of returning to the securities industry. C) would need to re-take their topoff exam and complete continuing education on the 2nd anniversary of passing the top-off exam. D) is not required to take any exams in order to return to the securities industry, but must complete all continuing education requirements upon return to the industry.

C

A type of trust which can only be altered with the consent of the trust beneficiary is a A) Revocable trust B) Executor trust C) Irrevocable trust D) Living trust

C

All of the following are exceptions for avoiding a 10% penalty on Traditional IRA withdrawals before age 59½ EXCEPT A) On account of death or disability B) Taken to buy, build or rebuild a first home C) Taken for income during an extended period of unemployment D) To pay for major medical expenses

C

An individual is currently contributing to her corporate retirement account. During this time she may A) Not contribute to an IRA B) Only make after-tax contributions to her IRA C) Contribute to an IRA D) Only make after-tax contributions to her corporate retirement account.

C

The "third market" is a marketplace where A) Listed securities trade in their primary listing venue. B) OTC securities trade on a stock exchange C) Listed securities trade in the OTC market D) OTC securities trade in a foreign market

C

Three-month Treasury bills are quoted A) as a percentage of par B) as a dollar price C) on a discounted yield basis D) as a percentage of 10 year notes

C

Tim is a registered representative who has a control relationship with the issuer of securities. He makes an offer of the issuer's securities to his clients, the Howells. At the time of the offer, he makes a verbal disclosure of his control relationship. Assuming the Howells want to buy the securities, what else must he do to avoid deception and manipulation? A) Nothing, he has satisfied his obligations with the verbal disclosure. B) He must withdraw the offer C) He must disclose the control relationship in writing prior to the sale's completion D) He must inform the SEC in writing prior to the sale's completion

C

Which of the following statements regarding a unit investment trust is not correct? A) It issues redeemable securities to investors B) It will have a specific termination date C) It will regularly adjust the composition of its portfolio D) It does not utilize the services of an investment advisor while the trust is active

C

Which two of the following statements about purchase payments for variable products are TRUE? I. they are invested in an insurer's general account II. they are invested in an insurer's separate account III. they purchase units IV. they purchase shares A) I and III B) I and IV C) II and III D) II and IV

C

Who sets the margin requirement for OTC stock? A) The FINRA B) The SEC C) The FRB D) The NYSE

C

A registered representative may share in the profits and losses in an account of a customer A) under no circumstances B) only with prior written consent from the customer C) only if the customer is an immediate family member of the registered representative D) with written consent from the firm and the customer

D

A securities dealer that is registered with the SEC A) is in good financial standing B) is approved as a reputable office for conducting municipal securities business C) is clear of conduct violations as of its most recent examinations D) has been released to conduct municipal securities business by the SEC

D

All of the following statements regarding the margin account disclosure statement are true EXCEPT A) Delivery of the margin account disclosure statement is required at or prior to the opening of the account B) Margin account disclosure delivery can take place physically in hard copy form or electronically C) The margin account disclosure must inform the customer that the firm can force the sale of assets without the customer's approval to meet a margin call D) A follow-up margin disclosure must be delivered to all margin customers at least once every 3 years in writing or electronically

D

In a cash account, which TWO of the following rules of settlement apply to the purchase of corporate securities? I. Regular way settlement of T + 1 II. Regular way settlement of T + 2 III. Payment is required by T + 3 IV. Payment is required by T + 4 A) I and III B) I and IV C) II and III D) II and IV

D

Karen is the 76-year-old owner of a Traditional IRA. What is the last day of the calendar year on which she can take a Required Minimum Distribution (RMD)? A) 1-Apr B) 15-Apr C) 30-Sep D) 31-Dec

D

On March 15, 2011, an investor buys a $1,000 par value 6% J&J 15 bond that can be called away at 103.75. If the bond is called on July 15, 2016, how much would the investor receive at redemption? A) 1030.75 B) 1037.5 C) 1060.75 D) 1067.5

D

Under the Securities Exchange Act of 1934, the SEC does which of the following? I. Regulates securities exchanges. II. Requires the registration of brokers and dealers. III. Prohibits inequitable and unfair trade practices. IV. Regulates over-the-counter markets. A) I and II only B) I and IV only C) II, III and IV only D) I, II, III and IV

D

Which of the following statements is correct regarding Traditional IRAs? A) Contributions are usually pretax, earnings and growth are taxdeferred, and all distributions are taxed as long-term capital gains. B) Contributions are usually aftertax, earnings and growth taxdeferred, and all distributions are taxed as ordinary income. C) Contributions are usually pretax, earnings and growth taxable each year, and all distributions taxed at a preferred rate. D) Contributions are usually pretax, earnings and growth are taxdeferred, and all distributions are taxed as ordinary income.

D

Which of the following would have the smallest impact on the share price of an OTC listed REIT? A) Lack of liquidity B) Occupancy rates C) Market conditions D) Pending mortgage applications

D

Which of the following statements are true regarding the OTC market? I. It facilitates the trading of stock not listed on an exchange II. It is a connection of brokerdealers via computers III. There can be more than one market maker in a security A) I and II only B) I and III only C) II and III only D) I, II and III

D -The OTC market is a decentralized market connecting to broker-dealers electronically. It is a negotiated market place where various market makers enter bids and asks and facilitates the trading of stock not listed on an exchange.

The phase of an annuity contract that is associated with annuity units is the A) Accumulation phase B) Performance phase C) Deferral phase D) Payout phase

D accumulation phase (paying in and buying accumulation units - interest in a subaccount, value and number varies) Payout/annuitization phase: accumulation units are converted into a fixed number of annuity units and paid out each month (payout value still varies each month based on underlying performance) most annuities have tax deferred growth but contributions are post tax and income taxes are paid on difference between basis and total value if withdrawal is made

Ad valorem taxes would most likely back which of the following bond issues? A) Special tax bonds B) Industrial development revenue bonds C) GO issued by the state of Washington D) GO bond issues by the city of Seattle

D ad valorem or property taxes back local GO bonds sales and income taxes back state issuances IDR are revenue bonds special taxes are backed by user fees (think fuel taxes, hotel or license taxes)

An investor originally invested $2,000 into a mutual fund, and subsequently received $250 in dividends which were reinvested into the fund. The investor's cost basis would now be A) $250 B) $1,750 C) $2,000 D) $2,250

D investors cost basis = purchase price + reinvested dividends

Which IRS table must a Roth IRA owner use to calculate Required Minimum Distributions after age 73? A) Uniform Life B) Single Life C) Joint Life D) None

D RMD's only applies to traditional IRA

The FINRA Conduct Rules state that I. the member or designated person must approve in writing each discretionary order entered and must frequently review all discretionary accounts to detect excessive trading II. a registered representative must have the client's prior written authorization before exercising any discretionary power III. transactions in discretionary accounts cannot be excessive in size A) I and II only B) I and III only C) II and III only D) I, II and III

D (additionally all trades in discretionary account must be approved by supervisor but not before execution of trade)

A brokerage firm can open an account for all of the following EXCEPT a(n) A) pension fund B) insurance company C) estate D) minor

D (can open UGMA account with an adult as a custodian for one minor)

Steven opened an options account with his RR Simon last week. Simon sent the options agreement to Steven but has not yet received the signed form in return. May Steven open new positions in this account? A) No, he must sign and return the options agreement before he may do any trades in this account B) Yes, as long as he has all the funds in his account prior to placing any orders C) No, he must await verbal confirmation from Simon prior to placing any options trades D) Yes, but if he doesn't return the options agreement with his signature next week he will be able to liquidate existing options positions only

D (has 15 days to return form before only allowed to place closing option trades only)

Which of the following orders would NOT be reduced on the ex dividend date? I. Buy limit order II. Open sell stop order III. Buy stop order IV. Sell limit order A) I and II B) I and IV C) II, III and IV D) III and IV

D) III and IV All orders placed below the market are adjusted downward on the ex-dividend date by the amount of the dividend. Orders placed below the market are buy limits, sell stops, and sell stop limits. Sell limits, buy stops and buy stop limits are not adjusted on the ex-dividend date

Anti-fraud provisions of the Securities Exchange Act of 1934 apply to which of the following?

EVERYONE, no person or transaction every free from this 1934 regulation

exempt securities under '33

- US gov and gov agency securities - non profit securities - muni bonds - commercial banks - commercial paper < 270 days exempt securities mean that no registration statement and prospectus but still subject to anti fraud provisions and provide an offering memorandum

penalty for short fall on RMD

- applies to traditional IRA not roth - must start taking april 1 following 73 birthday - 25% penalty now

accrued interest memorizations

- corporate, muni and agency 30 day months, 2 day settlement - t notes and bonds real days (365 day yr; 30 days hath sep, april, nov, june; 28 feb; 31 rest) - accrued interest paid up to but not including settlement date, beginning on last coupon date)

brokerage accounts must receive statements how often

- inactive: quarterly - has a transaction in that month: monthly - margin account: monthly

Interest rates have risen rapidly in the current economic environment. The price of stock of companies in which industry below would be most impacted by this change? A) Utility B) Pharmaceutical C) Construction D) Beverage

A) Utility because most highly leveraged

Which of the following is the best example of misappropriation of inside information? A) A corporate treasurer tells his neighbor of a large upcoming product recall his company will announce, after which the neighbor sells his stock in that company. B) A president of a company buys a large amount of shares of his company's stock because he is aware of a strong earnings report about to be announced. C) An administrative assistant at a large law firm learns of a large lawsuit to be filed against a major pharmaceutical company and immediately sells her stock in that company. D) A self-employed tax preparer for a small OTCBB company learns the company has developed an innovative new technology device while meeting with the CFO. He arranges to purchase a large amount of the company's stock.

C - occurs when a employee steals info from their employer and uses it to trade on that info in any stock (not just employers stock), this broadens the liability for misuse of inside information)

A $10,000 U.S. Treasury bond is quoted as Bid 102.08, Ask 16. How much would an investor pay to buy this bond? A) $10,216 B) $10,225 C) $10,250 D) $11,200

C Investors purchase at the ask price so 102.16 which is quoted in 32 so (102 + 16/32) * 100 = 10,250

If a municipal securities firm markets LGIP securities to potential customers, which of the following statements is TRUE? A) There is no specific disclosure document required because purchasers of these securities are institutional and sophisticated investors B) Investors must receive a prospectus no later than the settlement of the transaction C) Investors must receive an official statement no later than the settlement of the transaction D) Investors must receive an Information Statement no later than the date the trade is made

C That statement is often called an information statement. The prospectus delivery requirement instead applies to corporate securities.

If a representative comes into contact with suspicious activity involving currency transactions, the representative should A) File a CTR B) File an SAR C) Report the activity to his supervisor D) Contact the FBI

C The AML officer will file on behalf of firm if necessary (rep also doesn't file CTR)

Which two of the following statements are true about traditional IRAs? I. The catch-up provision begins at age 55 II. The maximum contribution is $7,000 per year III. Withdrawals can begin at age 59 ½ IV. Withdrawals can begin at age 59 ½, with a minimum of 5 years of contributions A) I and II B) I and IV C) II and III D) II and IV

C (5 year contribution limit only applies to roth and traditional IRA catchup provision begins at 50)

Which of the following may not be traded in the secondary market? A) Rights B) Warrants C) Mutual Funds D) ETF

C (mutual funds also known as open end investment companies that get redeemed aka sold back to issuer; UITS are also redeemed back to issuer)

A T Bond pays interest on the 15th of April & October. A trade occurs on Friday January 8. How many days of accrued interest does the buyer owe the seller?

C) 88 We must use actual days when determining accrued interest on Treasury notes and bonds. Treasuries use next business day settlement (not two business days as is the case with corporates and municipals.) The counting convention is to begin from (and including) the last coupon payment date and go up to but not include the settlement date of the trade (The buyer of the bond begins earning his own interest on the settlement date.) In this example, we have 17 days for October, 30 days for November, 31 days for December, and 10 days for January. Remember, with the trade occuring on a Friday and the settlement date being Monday, we must include Saturday and Sunday. The total is 88 days.

Which of the following securities carries the highest degree of purchasing power risk? A) Short-term note B) Blue chip stock C) Long-term, high-grade bond D) Convertible cumulative preferred stock

C) because receiving coupons that don't go up with inflation will have purchasing power risk, principal also doesn't increase with inflation, also inflation means interest rates are rising which means the price of the bond is going down

Under MSRB rules, all the following would be considered advertisements EXCEPT A) Offering circulars B) Market letters C) Official statements D) Summaries of official statements

C. Official statements are provided to purchasers of a new muni bond issuance, not required but if they are given they must be provided to all shareholders

coincident indicators

GDP, industrial production index and capacity utilization index, nonfarm payrolls, personal income, consumer spending and retail/manufacturing sales

stop orders

also sometimes called stop loss orders, can either protect profit in a long position (sell stop so price trigger is lower than current market) or prevent loss in a short position (buy stop so price trigger is higher than current market), become market order when triggered so can't be filled partially

rule 145

designed to protect shareholders of a business that is reclassifying, change ownership structure or M&A

ERISA

establishes minimum standards for private sector retirement plans

regulation A+

for smaller issuers to avoid full registration - tier 1: up to 20M in one year with no more than 6M being secondary; subject to state securities law - tier 2: 75M in one year no more than 22.5M being secondary, not subject to state securities law, have to update financial statements more often and be audited (usually tier 1 doesn't) - both have to provide offering statement and financial statements for last 2 FY

rule 144

how people can resell restricted / control stock, must hold for 6 months and must be public company shares if restricted and for control affiliate / corporate insider volume limits apply

144A

if QIB (100M+) can sell unregistered freely among themselves

lagging indicators

interest rates especially prime rate, unemployment rate, corporate profits, balance of trade (exports - imports where imports & domestic investments abroad & FX aid are debits and exports & foreign investments in US are credits), inventory/sales ratio, labor cost per unit of output and commercial and industrial loans outstanding