Chapter 1 SIE

A market maker's quote for a stock is as follows: Bid $23.20 - Offer $23.70 A market participant is able to sell stock to the market maker at:

$23.20

Which of the following earns a fee based on the amount of assets it has under management?

A market maker

When executing a principal trade for a customer, a broker-dealer will earn:

A markup or markdown

Which of the following is NOT defined as an accredited investor?

A person who has a current Series 79 registration

What type of account will hedge funds use when clearing their trades?

A prime brokerage account

According to FINRA, a person with assets of $80 million is considered:

An institutional investor

A broker-dealer that clears its trades through another broker-dealer is referred to as:

An introducing firm

Which of the following earns a fee based on the amount of assets it has under management?

An investment adviser

When used in reference to activities performed by a brokerage firm, the term "dealer" relates to which of the following?

Any person that buys a security from or sells a security to a customer from/for its own account

When used in reference to activities performed by a brokerage firm, the term "broker" relates to which of the following?

Any person that buys or sells securities for the accounts of others

Large blocks of stock can be traded anonymously through which of the following?

Dark pools

If an exchange has one entity that controls the trading in a specific stock, this entity is referred to as a:

Designated market maker

Since a broker-dealer does not clear its own transactions, it sets up an account at a clearing broker-dealer and provides the clearing broker-dealer with information on each of its individual customers. This account is referred to as a(n):

Fully disclosed account

Which of the following statements is NOT TRUE regarding corporate debt securities?

If the corporation has sufficient funds, it will pay the owners a cash dividend.

Which of the following responsibilities is NOT provided by a transfer agent?

Maintaining the issuer's ownership register for each issue of its securities

The investment banking department of a broker-dealer will NOT perform which of the following functions?

Make recommendations as to which companies investors should purchase or sell

When equity securities fail to qualify for listing on either a physical or electronic exchange, the securities are referred to as:

OTC equities

Which of the following is NOT considered an issuer of securities?

The SEC

If an investment adviser has $400 million of assets under management, it must register with:

The SEC only