SIE - Ch. 12

A firm that takes a position in a specific stock may be referred to by all of the following terms:

1. dealer 2. principal 3. market maker

All are exempt from the FINRA 5% Markup Policy:

1. mutual funds 2. new issues 3. municipal bonds

When an investor sells stock short, she should understand each of the following to be TRUE:

1. she wants the stock to decline in value 2. she's potentially subject to unlimited loss 3. she's borrowing stock

If no order qualifier is given, an order is assumed to be:

A day order

Each of the following are exempt from the FINRA 5% Markup Policy, EXCEPT:

EXCEPT: Listed Stocks

An investor who sells stock short should understand each of the following, EXCEPT:

EXCEPT: She must execute the short sale in a cash account

A firm that takes a position in a specific stock may be referred to by all of the following terms, EXCEPT:

EXCEPT: broker

A client has requested for her firm to sell 2,500 shares of DFG common stock. The stock is being held in street name within the client's account. As for the location of the securities, the order ticket is marked:

Long

If a client wants to place an order that will be given priority over all other type orders, what type of order should be entered?

Market order

When a firm's compensation is built into the net price of a trade, it's considered to be the:

Markup or markdown

A sell stop order is placed at 104. After the order is placed, the following trades occur: 106.50, 106.00, 105.25, 105.12, 104.25, 105.12. Which of the following statements are TRUE regarding the order.

TRUE - the order is not triggered

A buy stop limit order is placed at 45. After the order is placed, the following trades occur: 44.88, 44.88, 45.00, 45.12, 45.00. Regarding that trade, which of the following statements is TRUE?

TRUE - the order is triggered at 45.00

A trade which combines the executing firm's compensation on both a sale and a subsequent purchase is referred to as a(n):

proceeds transaction