SIE Chapter 1 missed checkpoint questions
A broker-dealer has a line of business restricted solely to the purchase and sale of securities with trade executions being handled by another member firm. Which of the following would best describe this type of firm?
Introducing/fully disclosed
On Friday, July 1 your customer purchased 10 3% T-bonds maturing in 15 years. This trade will settle on
July 5th two BUSINESS DAYS
Which of these statements is true regarding shelf offerings? A) The registration statement is effective upon completion of the cooling-off period. B) Shelf registration allows the issuer to sell portions of a registered shelf offering over a five-year period without having to reregister the security. C) Shelf registration allows the issuer to sell portions of a registered shelf offering over a four-year period without having to reregister the security. D) For securities offered via a shelf registration, a supplemental prospectus must be filed with the SEC before each sale.
For securities offered via a shelf registration, a supplemental prospectus must be filed with the SEC before each sale
Which of the following is not required to endorse a stock certificate for transfer? A) Proper endorsement by all owners B) Signatures of the receiving registered representative C) Certificates in good condition D) The correct number of shares are delivered
Signatures of the receiving registered representative
Your client, Alice Tate, lives in Irvine, California, and wishes to purchase some bonds that would be both state- and federal-tax free for her. You recommend some school district bonds from Costa Mesa. She then asks when she would need to pay for the bonds. You should tell her
T+2 (bc it is not a treasury)
Ron buys 522 shares of Narcissus, Inc., common stock in a cash account on Monday, March 19. He deposits cash in the account sufficient to cover the trade on March 20. How soon would he be able to withdraw those shares?
Wednesday March 21 This is a regular way settlement of a corporate security (T+2)
An order is entered by a customer to sell at 30 stop limit. Once the order is entered, the stock trades in the following sequence: 32, 29, 31, and 33. The order would be executed and the investor would receive a price of
31 This is a sell stop order with a limit of 30. Once the stock trades at 30 or lower, the order is elected (triggered) and becomes a live working order. This occurs at 29. The order will then be executed at its limit (30) or better. This occurs at 31.
The current quote for PQR Inc. common stock is bid 42, ask 42.10, 4 × 5. A customer who places an order to buy 200 shares at the market will likely pay how much for the purchase?
8240
Which of the following would be a secondary market transaction? A) A broker-dealer arranges for a customer's order to be executed on the NYSE B) A broker-dealer arranges for a customer to purchase an IPO C) A broker-dealer arranges for a customer to purchase an APO D) A broker-dealer arranges for a customer to purchase mutual fund shares
A broker-dealer arranges for a customer's order to be executed on the NYSE
Which of these broker-dealers would most likely have correspondent firms?
A self-clearing firm A self-clearing (or carrying) firm holds funds and securities of the fully-disclosed or introducing firm's customers and performs related functions, such as sending confirmations and statements for them. Those firms, for whom the carrying firm performs those services, are known as its correspondents.
WRJ stock is quoted as 21 bid, 21.15 offer. For a customer order, which of the following is true? A purchase can be made at $21 per share if buying at the market. A purchase can be made at $21.15 per share if buying at the market. The spread is $0.15. A sale can be made at $21.15 per share if selling at the market.
II and III
Which of the following would take place in the primary market? A) Securities sold on both the OTC and NYSE B) Securities bought and sold on the NYSE C) Securities sold to the public by the issuer D) Securities bought and sold on the OTC
Securities sold to the public by the issuer
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.
The sell stop limit order becomes a sell limit once triggered The sell stop order becomes an order to sell at the market when triggered
On Monday, August 1, your customer purchased 10 Treasury notes at a price of 99.5 that mature in three years. Cash to pay for the purchase must be delivered by what date?
Tuesday August 2nd
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 green shoe offering
The Securities Act of 1933 requires that
a new issue, unless specifically exempted from the Act, be registered with the Securities and Exchange Commission (SEC) before public sale.
For initial public offerings (IPOs) of common stock, all of the following would be considered restricted persons except A) fiduciaries acting on behalf of the underwriters. B) employees of the member firm. C) a member firm. D) a person owning at least 5% of the member firm.
a person owning at least 5% of the member firm (must be at least 10%)
Modulux, Inc., a NYSE listed manufacturing company, was founded by Clarence Mod. Clarence is now 82 years old and is looking to divest his significant interest in Modulux to capitalize the Mod Family Foundation, a charity. He has enlisted the help of Seacoast Securities, a regional investment banker based in Seattle, to run the sale. This is an example of
a secondary offering (bc the sales belong to clarence not the issuer)
Your customer opens a position at 45 and then closes it later at 47. This represents
a two-point gain or loss (bc they didn't say if it was a buy or sell)
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
an initial public offering (IPO).
Selling long is equivalent to which of the following?
selling to close
An order that when triggered becomes a limit order is called a
stop limit order
A customer placed an order to purchase 300 shares of DEF Corp. preferred stock. The broker-dealer sourced the shares from another broker-dealer that makes a market in the stock. The customer's firm acted as
broker
A corporation seeking to raise funds in order to expand its manufacturing capacity would do so in
the capital market
A stock power may be used in place of
the customer's signature on the certificate
Assets offered and traded in the securities markets can include all of the following except A) life insurance. B) equities. C) currencies. D) derivative products.
life insurance
Which of the following is not part of the secondary markets? A) Over-the-counter market B) Third market C) The exchanges D) Mutual fund market
mutual fund market
All of the following would be secondary market transactions except A) securities sold on both the OTC and NYSE. B) securities sold to the public by the issuer. C) securities bought and sold on the OTC. D) securities bought and sold on the NYSE.
securities sold to the public by the issuer
In order to qualify to invest in a Regulation A Tier 2 offering, a customer must do which of the following?
self-certify that they meet the requirements
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?
sell limit 75 GTC GTC order will live past today
