Chapter one Flashcards
(46 cards)
The third market is the term used to described ___ and ___ listed securities trading _____.
NYSE, AMEX and over-the-counter
The new issue market is also known as the ____ market
Primary Market
What is a market maker?
A person who enters quotes and stands ready to buy and sell securities for his own account on a regular basis
What is the OTCBB
Over-the-counter Bulletin Board - provides electronic quotes for non-Nasdaq (OTC equity) stocks
True or false: Unlike equities, bonds do not have organized exchanges
True. Unlike equity securities, corporate, municipal, and U.S. government bonds don’t have organized exchanges.
What is the role of a broker-dealer’s operations department?
To process paperwork, handle funds, and securities transfers, and settle and confirm transactions
What service does the Depository Trust and Clearing Corporation (DTCC) provides to its members?
Clearing, Settlement, and information services
An RR employer is referred to as a ___
A RR’s employer is referred to as a broker-dealer (BD)
Define an introducing BD
A BD using another BD to handle cash and securities, trade execution, reporting, clearing, and confirmation
List some examples of issuers
Corporations, the U.S Treasury, foreign governments, states, and other municipalities
BD employees who are involved in the investment banking and securities business. are called ____
Registerest representatives (RR)
True or false: An individual with a $100 million in assets is a QIB
False: even with $100 million in assets, individuals are not considered QIBs
Where can you find quotes for stocks not listed on an exchange or Nasdaq?
the OTCBB or Pink sheets
Identify the acronym: OTC
Over the counter
True or false: Both stocks and bonds represent ownership in a corporation
False: bonds are debt instruments, while stocks represent ownership interest in a corporation
What does it mean to clear a trade?
It is the end-of-day process of matching trades executed by a BD to determine what is owed
Explain the primary market
The market on which new securities are offered
Where may quotes for non-nasdaq (OTC equity) stocks be found?
Pink sheets or the OTC bulletin board
QIB stands for?
Qualified institutional buyer (QIB)
Define a prime Broker
A BD that clears and settles trades effected by one or more executing brokers at the direction of the customer
define the term broker
Any person engaged in the business of effecting transactions in securities for the account of others
A BD that does not hold a customer’s cash or securities is known as a
Non-carrying firm
What are the pink sheets?
a real-time electronic quotation system for the OTC equities
List some responsibilities of a transfer agent
Issue and cancel securities, pay dividends and interest, mail shareholder reports, handle lost or stolen certificates
