Series 79 -Flash Cards- Class 1
(208 cards)
1
Q
The four phases of the economic cycle
A
Expansion, Peak, Recession (Contraction), Trough
2
Q
Longer term, severe economic contraction
A
Depression
3
Q
A nation’s annual output of all goods and services
A
Gross Domestic Product (GDP)
4
Q
Measures the general rate of increase or decrease in prices paid for certain standard goods
A
Consumer Price Index (CPI)
5
Q
General increase in the level of prices
A
Inflation
6
Q
Two economic conditions that generally accompany deflation
A
Severe recession, rising unemployment
7
Q
The three types of economic indicators
A
Leading, Lagging and Coincident
8
Q
Type of indicator that predicts a trend in the economy
A
Leading
9
Q
Leading, Lagging or Coincident indicator? Money Supply
A
Leading
10
Q
Leading, Lagging or Coincident indicator? Employment Levels
A
Coincident
11
Q
Leading, Lagging or Coincident indicator? Corporate Profits
A
Lagging
12
Q
Leading, Lagging or Coincident indicator? Industrial Production
A
Coincident
13
Q
Leading, Lagging or Coincident indicator? Average duration of unemployment
A
Lagging
14
Q
Leading, Lagging or Coincident indicator? New orders for consumer goods
A
Leading
15
Q
Leading, Lagging or Coincident indicator? Stock Prices
A
Leading
16
Q
Leading, Lagging or Coincident indicator? Personal Income
A
Coincident
17
Q
Leading, Lagging or Coincident indicator? GDP
A
Coincident
18
Q
Leading, Lagging or Coincident indicator? Manufacturing and trade sales
A
Coincident
19
Q
Leading, Lagging or Coincident indicator? Ratio of Inventory to Sales
A
Lagging
20
Q
Economist who theorized that aggregate demand controls employment prices
A
John Maynard Keynes
21
Q
The originator of monetarist theory
A
Milton Friedman
22
Q
The economist associated with supply side economic theory
A
Arthur Laffer
23
Q
Three tools used by monetarist theory to regulate the economy
A
Reserve Requirement, Discount Rate, Federal Open Market Operations
24
Q
Believes market forces should determine prices of all goods; federal government should reduce spending and taxes
A
Supply Side Economics
25
Two critical fiscal policy tools used to impact economic performance
Level of Taxation and Government Spending
26
Economic theory that promotes strong government involvement in economic policy
Keynesian Economics
27
Economic theory that promotes less government spending and lower taxes
Supply Side Economics
28
Most readily available type of money
M1
29
Acts as agent of the US Treasury
Federal Reserve Board
30
Regulates the U.S. Money Supply
Federal Reserve Board
31
Conducts the U.S. Government's Open-Market Operations
Federal Open Market Committee (FOMC)
32
Impact on the Money Supply of FOMC Purchase of Securities
Increases
33
Impact on the Interest Rates of FOMC Purchase of Securities
Decreases
34
Interest Rate Charged between Banks for Loans of Excess Reserves
Federal Funds Rate (FFR)
35
Minimum Amount of Customer Deposits that Commercial Banks must Deposit with the Federal Reserve
Reserve Requirement
36
The Interest Rate charged by the Fed to member banks for short-term loans
Discount Rate
37
Economic Policy that centers on Federal Spending, Taxation and Federal Budgets
Fiscal Policy
38
Impact of Tight Monetary Policy on Interest Rates
Interest Rates Rise
39
The Flow of Money from Low-Yielding Investments to Higher Yielding Investments
Disintermediation
40
Impact of a Week Dollar on U.S. Exports
Exports will Rise
41
Impact of a Week Dollar on U.S. Imports
Imports will Fall
42
Impact on the Balance of Payments when U.S. Exports Exceed U.S. Imports
Surplus in the Balance of Payments
43
Impact on the Balance of Payments when Foreign Interest Rates are Higher than U.S. Interest Rates
Deficit in the Balance of Payments
44
Uses Charts and Historic Trading Patterns to Determine when to Move in to and out of the Markets
Technical Analysis
45
Bases Investment Decisions on Broad-Based Market Trends, and Analysis of Financial Reports
Fundamental Analysis
46
Defensive, Cyclical or Growth Industry? Food
Defensive
47
Defensive, Cyclical or Growth Industry? Utilities
Defensive
48
Defensive, Cyclical or Growth Industry? Steel
Cyclical
49
Defensive, Cyclical or Growth Industry? Automobile
Cyclical
50
Defensive, Cyclical or Growth Industry? Technology
Growth
51
Basic Balance Sheet Equation
Assets - Liabilities = Net Worth
52
Financial Statement that Summarizes Revenues and Expenses
Income Statement
53
Features Charting and Market Timing
Technical Analysis
54
Predicts Company Performance Based on Financial Statements and Overall Economic Health
Fundamental Analysis
55
Characterized by Falling Stock Markets, Rising Inventories, Declining GDP
Contraction
56
Characterized by Low Unemployment, Increased Business Activities
Expansion
57
Frequency of Interest Payments to Bondholders
Semi-Annual
58
Par Value of a Corporate Bond
1000 (One Thousand)
59
Equivalent of 100 Basis Points
0.01 (One Percent)
60
Relationship between Bond Prices and Bond Yields
Inverse
61
Value of One Bond Point
10 (Ten)
62
A Bond that is Priced Below Par
Discount
63
Use a 360-day Year in the Calculation of Accrued Interest
Municipal and Corporate Bonds
64
Use a 365-day Year in the Calculation of Accrued Interest
U.S. Government Bonds and Notes (e.g.. T-Notes. T-Bonds)
65
An Unsecured Corporate Bond
Debenture
66
Most Senior Form of Corporate Bond
Secured
67
Three Examples of Secured Corporate Bonds
Equipment Trust Certificates, Mortgage Bonds, Collateral Trust Bonds
68
Security with the most Junior Claim in a Corporate Liquidation
Common Stock
69
Agency Debt that is Backed in Full by the U.S. Government
Ginnie Mae
70
Considered the Safest Form of Debt Issued in the U.S.
U.S. Government Bonds and Notes (e.g. T-Notes. T-Bonds)
71
Taxable at the Federal Level; Exempt from Taxation at the State Level
U.S. Government Bonds and Notes (e.g. T-Notes. T-Bonds)
72
Of YTC, YTM and CY, the Yield that is the Highest when a Bond is Trading at a Premium and is Callable
Current Yield (CY)
73
Of YTM, YTC and CY, the Yield that is the Highest when a Bond is Trading at a Discount and is Callable
Yield to Call (YTC)
74
Of YTM, YTC and CY, the Yield that is the Lowest when a Bond is Trading at a Discount
Current Yield (CY)
75
Of YTM, YTC and CY, the Yield that is the Lowest when a Bond is Trading at a Premium and is Callable
Yield to Call (YTC)
76
Amount a Bondholder Receives at Maturity of an ABC 9% Bond
$1045 (Par + 1 Semiannual Interest Payment)
77
Amount of Interest Paid Every 6 Months on 5M XYZ 6% Bonds
$150 ($30 Semiannual Interest per Bond X 5 Bonds)
78
Fixed Rate Equity Security that Responds to Market Conditions Like a Bond
Preferred Stock
79
The Date in the Future at which a Bondholder Receives Principal
Maturity
80
Of Long-Term and Short-Term Bonds, Which Generally Pays a Higher Interest Amount?
Long-Term Bonds
81
Of Long-Term and Short-Term Bonds, Which Generally has a Lower Price Volatility?
Short-Term Bonds
82
The Degree of Risk Associated with an Issuer's Ability to Repay the Principal
Credit or Default Risk
83
A Bond that is Rated BBB or Above by Standard and Poor's
Investment Grade
84
A Bond that may be Redeemed by the Issuer Prior to its Maturity Date
Callable Bond
85
Risk that a Bond may be Called Prior to Maturity
Call Risk
86
The Process of Calling Bonds when Interest Rates have Fallen
Refunding
87
Issuer Funds Set aside in Advance of a Call
Sinking Fund
88
Allows the Issuer to Call Bonds before Maturity if Certain Specified Events Occur
Market-Out Clause
89
Specific Time Period from Date of Issue When a Bond Cannot be Called
Call Protection Period
90
Type of Bond Issued that is Not Typically Callable
U.S. Government Bonds (e.g. Treasury Bonds, T-Bonds)
91
Risk that Proceeds from a Called Bond Cannot be Invested Favorably
Reinvestment Risk
92
Annual Interest Divided by Current Market Price
Current Yield (CY)
93
Environment in Which Longer-Term Bonds have Higher Yields than Short-Term Securities
Normal Yield Curve
94
Corporate Instruments with a Maturity of No More than 270 days
Commercial Paper
95
Maximum Maturity of Commercial Paper
270 Days
96
Bonds Backed only by the Good Faith of the Issuing Corporation
Unsecured Bonds or Debentures
97
Protects Bondholder through a Written Agreement Between Issuer and Trustee
Trust Indenture
98
Typically Backed by Real Estate Holdings of a Corporation
Mortgage Bond
99
Typically Secured by other Securities Owned by the Corporation
Collateral Trust Bond
100
Secured by Physical Assets Owned by the Company
Equipment Trust Certificates
101
Allow for the Exchange of Debt for Equity Issued by the Same Corporation
Convertible Debt
102
The Stated Number of Common Shares a Bondholder Receives Upon Conversion
Conversion Ratio
103
The Point at Which there is Neither Profit or Loss in a Conversion
Conversion Parity
104
Purchased at a Deep Discount; Pays No Interest During the Life of the Bond
Zero-Coupon Bond
105
The Price of a Bond Quoted at 105
1050 (One Thousand Fifty)
106
The Price of a Bond Quoted at 97
970 (Nine Hundred Seventy
107
How Bond Prices are Quoted
As a Percentage of Par
108
The Difference in Basis Points between 6.20% and 6.50%
30 Basis Points
109
An Issuer with Outstanding Bonds that have a 5% Coupon Issues Similar New Bonds with a 6% Coupon. The Outstanding Bonds will Trade at a
Discount
110
An Issuer with Outstanding Bonds that have a 5% Coupon Issues Similar New Bonds with a 4% Coupon. The Outstanding Bonds will Trade at a
Premium
111
An Investor Buys a 6% Bond Trading at a 6.5% Basis. The Bond is Purchased at a
Discount
112
An Investor Buys a 6% Bond Trading at a 5.5% Basis. The Bond is Purchased at a
Premium
113
An ATT ZR 13 Bond will Pay How Much to the Owner at Maturity?
1000 (One Thousand)
114
U.S. Government Instrument that Matures in 1 Year or Less
Treasury Bill (T-Bill)
115
U.S. Government Instrument Sold Through Weekly Auctions
Treasury Bill (T-Bill)
116
U.S. Government Instrument that is Quoted on an Annualized Discount Yield Basis
Treasury Bill (T-Bill)
117
U.S. Government Instruments that Matures within 2-10 Years
Treasury Notes (T-Note)
118
U.S. Government Instruments that typically Matures in 20-30 Years
Treasury Bonds (T-Bonds)
119
U.S. Government Instruments that are quoted in 32nds
Treasury Notes and Treasury Bonds (T-Notes and T-Bonds)
120
Inflation-Indexed Bonds Issued by the U.S. Treasury
TIPS (Treasury Inflation Protected Securities)
121
U.S. Government Zero-Coupon Bond Instrument that has No Reinvestment Risk
STRIP (Separate Trading of Registered Principal & Interest Securities)
122
Investment Risk Most Associated with Mortgage-Backed Securities
Prepayment Risk
123
Investment Risk that Coincides with Early Payment of Mortgage-Backed Securities
Reinvestment Risk
124
Distinct Maturity Categories of CMOs (Collateralized Mortgage Obligations)
Tranches
125
Frequency of Interest Payments on Mortgage-Backed Securities
Monthly
126
Mortgage-Backed Securities with the Implied Backing of the U.S. Government
Fannie Mae and Freddie Mac
127
The Corporate Practice of Raising Money to Call Outstanding Bonds
Refunding
128
Bonds Sold at a Deep Discount because of their Credit Rating
Junk Bonds
129
When Interest is Paid on 5M XYZ F&A 15 6s Bond
February and August 15
130
The Type of Risk Rated by Moody's, Standard & Poor's and Fitch
Default or Credit Risk
131
The Risk that the Issuer will Not be able to Pay the Principal and Interest Owed on Outstanding Debt Securities
Default or Credit Risk
132
Amount Above Par that an Issuer May Pay to Call Bonds
Call Premium
133
A Bond which can be Sold at face Value to the Issuer Prior to Maturity at Pre-Determined Times
Puttable Bond
134
The Formula fo Computing Current Yield (CY)
Annual Interest Divided by Current Market Price
135
Another Name for the Coupon Yield, which is set at the issuance of the Bond
Nominal Yield
136
Graphically Depicts the Yield Relationship between Long-Term and Short-Term Bonds
Yield Curve
137
Corporate Secured Bonds that have the Highest Priority Claim
Mortgage Bonds
138
Type of Corporate Security that is Backed by the Title to Newly Acquired Equipment
Equipment Trust Certificate
139
Two Companies that Rate Bond Issues
Moody's and Standard and Poor's
140
Type of Bonds Often Issued by Corporations Emerging from Bankruptcy that Pay Interest Only if Income is Available
Income Bond
141
The Stock Price at Which a Convertible Bond can be Exchanged for Shares of Common Stock
Conversion Price
142
The Organization that Maintains a List of Known or Suspected Terrorists that Must be Checked when a Firm Verifies a New Customer's Identity
US Treasury (Office of Foreign Assets Control -- OFAC)
143
Responsible for Maintaining an Orderly Market in the Stocks for which he is Responsible on NYSE Floor
Designated Market Maker (DMM)
144
The Process of Acting as a Dealer by Standing Ready to Buy or Sell Securities from Inventory and Making Money from the Spread as on NASDAQ
Market Making
145
Over-the-Counter, Negotiated-Price Trading of Exchange-Traded Securities
Third Market Trade
146
Direct Trading of Large Blocks of Stocks between Institutions Through Electronic Trading Networks
ECNs (Electronic Communications Networks)
147
Price-Weighted Index of 30 "Blue Chip" U.S. Stocks of Industrial Companies
Dow Jones Industrial Average
148
Capitalization-Weighted Index of 500 Stocks, Regarded as the Standard for Measuring Large Cap U.S. Stock Market Performance
S&P 500
149
The First Day that a Buyer Buys Stock Without a Dividend
Ex-Dividend Date
150
The Date on Which a Corporation Pays a Dividend to Shareholders of Record
Payable Date
151
The Last Day a Buyer can Buy Stock and Receive the Dividend
Business Day Before the Ex-Date
152
The U.S. Stock Exchange Where Trades are Completed Over-the-Counter through a Network of Dealers in No Physical Location
NASDAQ
153
Tier of NASDAQ Securities, with a listing minimum of $4.00 per Share
NASDAQ Global Market
154
Top 1/3 of NASDAQ Global Market Securities
NASDAQ Global Select Market
155
Formerly the NASDAQ SmallCap Market, this Market Attracts Smaller, Less Capitalized Companies
NASDAQ Capital Market
156
Quoting Service for SEC Filing Issuers that Do Not Meet Listing Requirements for Other Exchanges; Has No Listing Standards
Over-the-Counter Bulletin Board
157
Employed by an Exchange Member Firm to Execute Trades on the Exchange Floor on Behalf of the Firm's Clients
Floor Broker
158
Member of the Exchange that Trades on the Exchange Floor for his Own Account
Floor Trader
159
FINRA Rules that Address Violations of Conduct Rules
Code of Procedure
160
FINRA Rules that Address the Settlement of Monetary Claims Between Firms, Registered Representatives and the Public
Code of Arbitration Procedure
161
The Two Components that Comprise FINRA CE Requirements
Regulatory Element and Firm Element
162
Form Filed that Must be Filed to Apply for FINRA Registration
U-4
163
Form that terminates FINRA Registration; Filed with FINRA within 30 Days of Termination
U-5
164
Number of Days a Firm has to provide Written Notification of the Termination of a Registered Representative to FINRA
30 Days
165
Maintains Registration Information and Disciplinary History of All Registered Persons
Central Registration Depository (CRD)
166
Three Stages of Money Laundering Defined by the Bank Secrecy Act
Placement, Layering and Integration
167
Amount of Currency Deposits in a Single Day that Trigger Reporting to the IRS
10,000 (Ten Thousand)
168
Form that Must be Filed by Broker-Dealers if Unusual Financial Activity is Suspected
Suspicious Activity Report (SAR)
169
Regulation that Requires Broker-Dealers to Establish Written Anti-Money Laundering Programs and Designate an Anti-Money Laundering Compliance Officer
USA Patriot Act
170
Business Activities Outside a Registered Representative's Relationship with a Member Firm
Outside Business Activities
171
Transactions in Securities that are Not Sponsored by a Registered Representative's Broker-Dealer. Also called Selling Away.
Private Securities Transactions
172
Officers and Management Personnel of Broker-Dealers
Registered Principals
173
Waiting Period Required Before a Second Attempt on a FINRA Qualifications Examination
30 Days
174
Waiting Period Required After Three Unsuccessful Attempts on a FINRA Qualifications Examination
6 Months
175
Period of Time in Which Updates, such as Change of Address, must be filed with CRD
30 Days
176
Where the Public May Check Background Information of Registered Representatives and Broker-Dealers
FINRA Broker Check
177
An Office of a Broker-Dealer that has Responsibility for Final Review of Advertising and Review of Customer Orders
Office of Supervisory Jurisdiction (OSJ)
178
When a Registered Representative Must Complete Regulatory Element Training for the First Time
Within 120 Days of the 2nd Anniversary of Registration
179
Required Frequency for Completion of Regulatory Element Training on an Ongoing Basis
Every Three Years
180
Status of Persons Who have Not Completed Regulatory Element Training as Required
CE Inactive
181
Frequency with which a Member Firm Must Complete a Needs Analysis and Develop a Written Training Plan for its Firm Element Training Program
Annually
182
Loss or Prevention of Registration Resulting from Prohibited Activities
Statutory Disqualification
183
Required from a Registered Representative Who Wishes to Participate in Outside Business Activities
Prior Written Notice to the Broker-Dealer
184
Required for a Registered Reprentative's Participation in Private Securities Transactions
Written Permission from a Broker-Dealer
185
Three Requirements for Sharing Customer Accounts
Written Permission from the Broker-Dealer; Written Authorization from the Customer; Sharing in Direct Proportion to Financial Contributions Made to the Account
186
Joint Account that is Not Subject to Account Sharing Rules
Account with Immediate Family Members
187
Limit on Gifts and Gratuities Given by a Firm or its Associated Persons to Employees or Representatives of Other Firms
$100 Per Year
188
Required When a Registered Representative Receives a Written Customer Complaint
Inform Supervisor or Principal
189
Sanctions that May be Imposed by FINRA When Member Firms or Associated Persons Violate FINRA Rules
Censures, Fines, Suspensions, Explusions, Bars from Activity or Association with Member Firms Cease and Desist Orders (No Jail Sentences)
190
Standard Method of Dispute Resolution for the Securities Industry
Arbitration
191
Required from Customers to Permit Arbitration as a Means of Dispute Resolution
Prior Written Permission
192
Maximum Dollar Amount of Claims Eligible for Settlement Through Simplified Arbitration Proceedings
50,000 (Fifty Thousand)
193
Time Frame for Payment of Monetary Awards Determined by Arbitration
30 Business Days
194
Efficient Less Expensive Alternative to Arbitration for Settlements of Disputes
Mediation
195
Three Characteristics of Bonds Subject to Provisions of Trust Indenture Act of 1939
Issued by Corporations, Size Over $5 Million in a 12 Month Period, Maturity of 9 Months or More
196
Maximum Coverage Per Account Under SIPC
500,000 (Five Hundred Thousand)
197
Maximum Amount of Cash Claims Per Account Under SIPC
250,000 (Two Hundred Fifty Thousand)
198
The Barrier that Must be Established Between Departments to Prevent a Free Flow of Sensitive Information
Firewall (Information Barrier, Chinese Wall)
199
Civil Penalties for Violation of the Insider Trading and Securities Fraud Enforcement Act of 1988
300% of Profits Made or Losses Avoided (i.e. Treble Damages)
200
Requires Corporate Bond Issuers to Appoint Trustees to Protect the Interests of Bondholders
Trust Indenture Act of 1939
201
Types of Quotes Permitted for Equities on the OTCBB
Unpriced Indications or Firm Quotes
202
Minimum Initial Bid Price and Number of Market Makers for NASDAQ Securities
$4 Bid Price and 3 Market Makers
203
An Electronic Quotation System that Displays Quotes from Broker-Dealers for Many Over-the-Counter Securities but Does Not Require Firm Quotes
OTC Pink
204
SARs (Suspicious Activity Reports) Must be Filed with FinCen within
30 Days of Detection of Suspicious Activity
205
Currency Transaction Reports are Made Within
15 Days
206
Coverage under SIPC is Per Separate
Customer
207
Act Requiring Reporting of Kickbacks Involving Foreign Governments
Foreign Corrupt Practices Act
208
Documents that can Confirm Identity of a New Customer as Specificed by a Firm's Customer Identification Program
Unexpired Driver's License or Passport
