288 SIE exam caril Study Guide Questions with Correct Answers

Document Content and Description Below

288 SIE exam caril Study Guide Questions with Correct Answers What type of risk is unique to a specific industry, business enterprise, or investment type? >>>Nonsystematic risk Under which of the ... following circumstances is an investor in a position to acquire stock? >>>Buy a call, sell a call (The holder of a call has the right to buy stock at the strike price if exercised. The seller of a put is obligated to buy stock at the strike price if exercised) Options- a premium >>>the cost of an option contract, expressed in dollars per share of the underlying stock Options- strike price >>>The price at which the stock will be bought or sold if the contract is exercised, expressed in dollars per share A customer believes that ABC's price will go up but does not have the money to buy 100 shares right now. How could the customer use options to profit from an increase in the stock's price? >>>buy calls, write puts (both are bullish) A corporation's offer to current stockholders of the ability to purchase a proportionate number of new shares at a specific price for a limited time is called a >>>right (they usually expire in 30-45 days) American depositary receipts (ADRs) >>>issued by banks, represent a specific number of shares of a foreign company, and trade and pay dividends in dollars Which of the following records must be maintained for 6 years? >>>Customer ledgers (statements) While underwriters can assist with preparation and filing, the accuracy and adequacy of these documents is the responsibility of the >>>Issuing corporation What institutions serve as depository and clearing facilities? >>>Depository Trust Company and National Securities Clearing Corporation (most specifically) then carrying and clearing firms can act as these as well. What is a transfer agent? >>>(often a bank) for a corporation is responsible for ensuring that its securities are issued in the correct owner's name, canceling old and issuing new certificates, maintaining records of ownership, and handling problems relating to lost, stolen, or destroyed certificates What is the function of the clearing corporation? >>>Acting as an intermediary in a trade, examples of these can be a commercial bank, can be a broker-dealer but doesn't have to be Who is considered a control person (security) >>>those owned by directors, officers, or persons (which include corporations, trusts, etc.) who own or control 10% or more of the issuer's equity securities (an unaffiliated person would have to own 10% or more of the outstanding shares) What are the two components of Return on Investment? >>>Capital gains and income To expand the overall economy, we want to >>>buy securities via open-market operations, pushing interest rates down To meet a Regulation T margin call, a customer would have how long? >>>settlement plus 2 additional business days (or S + 2) What is A fully disclosed broker-dealer >>>one that introduces its business to a carrying firm to clear transactions The regulation enacted by the SEC to protect the privacy of customer information is known as >>>Regulation S-P A market maker that does not honor its firm quote is said to be >>>"backing away" A deficit in the U.S. balance of payments can occur if >>>interest rates in foreign countries are higher than U.S. domestic rates and U.S. consumers are purchasing (importing) foreign goods [Show More]

Last updated: 2 years ago

Preview 1 out of 25 pages