SIE Unit 1 Checkpoint Exam

The enforcement of MSRB rules upon broker-dealers is performed by

FINRA

The ABC Chemical Corporation wishes to advertise its upcoming offering of common stock in a tombstone advertisement that they, the issuer, will place. When placing the tombstone advertisement, which of the following would be least likely to appear?

The names of the investment bankers underwriting the issue

A business entity that performs the function of receiving and delivering payments and securities on behalf of both parties to a securities transaction is called

a clearing agency

Which one of the following are tools used by the Federal Reserve Board (FRB) to impact the money supply?

- Changing the reserve requirements - Changing the discount rate - Open market operations of the FOMC

The Securities Exchange Act of 1934 allows for the creation of self-regulatory organizations (SROs) to write and in some instances enforce compliance by its member firms and persons associated with its member firms. Which of the following are SRO registered with the Securities Exchange Commission (SEC)?

- The MSRB - The CBOE - FINRA

ABC Corporation has filed a registration statement with the SEC for the sale of 1 million shares of common stock. This will be the first public offering for ABC. Twelve days into the cooling-off period, ABC receives a deficiency letter from the SEC requesting further information. Five days later, ABC submits the required corrections. Assuming no other problems, this issue should become effective in

8 days (When the issuer submits the corrections necessary to satisfy the deficiency letter, the 20-day cooling-off period picks up where it left off; in this case, from 12 days.)

Which of the following transactions represents the greatest potential risk to an investment banker?

A firm commitment offering

All of the following would decrease the U.S. balance of payments deficit EXCEPT A) an increase in exports of domestic goods from the United States B) a decrease in dividend payments by U.S. companies to foreign investors C) a decrease in purchases of U.S. securities by foreign investors D) a decrease in imports of foreign goods into the United States

C) a decrease in purchases of U.S. securities by foreign investors

Producers would generally report rising inventories during which period of the business cycle?

Contraction

An individual is defined by the SEC as an accredited investor if the individual has a net worth of

Greater than $1 million, or has had an annual income of greater than $200,000 in each of the 2 most recent years

An investment banker primarily engages in which of the following activities?

Helping issuers to raise capital through securities issuances

First Amalgamated Bank of Buffalo, a large commercial bank, is a member of the Federal Reserve System. Should the bank need to increase its reserves, it could... I. borrow from the FRB and pay the discount rate II. borrow from the FRB and pay the federal funds rate III. borrow from another member bank and pay the discount rate IV. borrow from another member bank and pay the federal funds rate

I & IV

GEMCO Oil and Gas, listed on the NYSE, wishing to sell up to $300 million of convertible debt as market conditions permit, files a shelf registration statement with the SEC. Which of the following statements are TRUE? I. For securities offered via a shelf registration, a supplemental prospectus must be filed with the SEC before each sale. II. The registration statement is effective upon completion of the cooling-off period. III. Shelf registration allows this issuer to sell portions of a registered shelf offering over a 2-year period without having to reregister the security. IV. Shelf registration allows this issuer to sell portions of a registered shelf offering over a 3-year period without having to reregister the security.

I & IV

The SEC has established rules regarding delivery of a prospectus when a secondary market transaction occurs after the effective date. Which of the following statements comply with those rules for initial (IPO) and additional (APO) public offerings? I. An IPO of a stock to be listed on the NYSE requires delivery for a period of 25 days. II. An IPO of a stock that will not be listed nor quoted over Nasdaq requires delivery for a period of 40 days. III. An APO of a stock listed on the NYSE requires delivery for a period of 25 days. IV. An APO of a stock that will not be listed nor quoted over Nasdaq requires delivery for a period of 40 days.

I & IV

With regards to fiscal policy, it would be CORRECT to state that... I. fiscal policy is considered the most efficient means to solve short-term economic problems II. fiscal policy is not considered the most efficient means to solve short-term economic problems III. fiscal policy refers to governmental budget decisions enacted by our president and Congress IV. fiscal policy refers to governmental budget decisions enacted by our president and the cabinet

II & III

It would be reasonable to expect an increase in exports from the United States if... I. the dollar strengthened against the euro II. the yen strengthened against the dollar III. the Swiss franc weakened against the dollar IV. the dollar weakened against the British pound

II & IV

The Federal Reserve is concerned that the economy is slowing. Which of the following actions would the Fed most likely engage in?

Pursue an easy money policy to lower interest rates

Which of the following types of broker-dealer would most likely have correspondent firms?

Self-clearing

A broker-dealer that concentrated its business efforts on proprietary trading would most likely be functioning as

a market maker

An institutional customer, such as a hedge fund, utilizes the services of a broker-dealer who provides custody of securities as well as other back-office functions while allowing the customer to establish relationships with other broker-dealers for the purpose of executing orders. This account would be known as

a prime account

Both exempt and nonexempt securities have full disclosure documents available to the investing public so that an informed investment decision can be made. The document associated with exempt securities would be

an official statement or offering circular

Most economists would agree that rising employment would be found during periods of

inflation

In most cases, the majority of private placements are sold to

institutional investors

A corporation seeking to raise funds in order to expand its manufacturing capacity would do so in

the capital market

It is generally agreed that the most volatile interest rate in the U.S. economy is

the fed funds rate