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SIE Flashcards

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1
Q

NCI

A

Non-conventional Investment that require approval as they come from bankrupt companies and no interest will be paid until company is profitable, usually income bonds

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2
Q

Suspicious activity reports sent to FINRA by brokerage firms must be held for how long?

A

5 years

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3
Q

What is a Series EE bond?

A

US savings bond that is NON-NEGOTIABLE since it isn’t publicly traded

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4
Q

ETN

A

(exchange traded notes) debt securities issued by a banks where the amount received at maturity usually depends on the performance of a Stock Index. Got no coupon rates
Extra: not suitable for an income objective

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5
Q

BABs (Build America Bonds)

A

BABs have interest that are federally taxed because the bonds are issued by Congress not Municipal securities

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6
Q

Eurodollars

A

US dollars in foreign banks

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7
Q

Max % of affiliated persons on an investments company board of directors

A

60%

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8
Q

Trust Indenture Act of 1939

A

New issues of corporate bonds that are publicy available must be registered with the SEC

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9
Q

Debentures

A

Bonds backed by the full faith and credit of the company
Also known as Unsecured since theirs no real backing

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10
Q

Moody’s investment grade rating system?
Highest to lowest

A

Aaa -> Aa -> A -> Baa

These are speculative ratings Ba -> B -> Caa -> Ca -> C

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11
Q

When must a confirmation of a customers trade be delivered to FINRA Firm?

A

Completion of transaction

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12
Q

Moral Obligation Bonds

A

Revenue bonds that need legislative approval of a municipality to be issued

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13
Q

Stocks issued through Regulation S exemption are prohibited from trading in US markets for how long?

A

1 Year

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14
Q

UIT ( Unit Investment Trusts)

A

Investment companies that have fixed portfolios that do not have board of directors or managers

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15
Q

The highest operating expense (annual fee) for a mutual fund

A

Investment advisory fee

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16
Q

How often must brokerage firms inspect their branch offices according to FINRA rules

A

Every 3 years

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17
Q

Brokers broker transact business with all except

A

Institutions

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18
Q

Tax penalty for excess IRA contribution?

A

6%

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19
Q

Which of the following affect the holding period of stock

A

Long calls short calls Long puts ✅SHORT PUTS✅

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20
Q

Covenants

A

Promises on an indenture made by an issuer of a revenue bond

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21
Q

Stabilization Bids

A

Bids offered to the public AT or BELOW Public Offering Price to prevent drop in new security price

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22
Q

Competitive offerings

A

The issuer determines the total par value of bonds maturities

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23
Q

Tax with unified tax credits

A

First amount of money is not taxed

EX: Estate

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24
Q

Currency transactions reports must be filed for money orders or cash exceeding

A

$10000

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25
ADRs
Receipt for a Foreign security exchanged in US markets
26
How often must brokerage firms send balance sheets to customers if they maintain custody of their assets
Semi-Annually
27
What signature is required when a customer wants to open a new account in a brokerage firm?
A Principals
28
A bond trades flat?
A bond does not have accrued interest
29
Takedown
The largest portion of underwriting spread Money earned by the syndicate for each new security sold
30
RTRS
Real Time Reporting System Reports trades of municipal bonds to public
31
Indenture
The legal agreement between issuer and trustee of bondholders. listed on the face of the bond.(maturity, par value) Only interest rate on it is the nominal yield(coupon rate)
32
Sinking funds
Bank (escrow) accounts used to save money to pay off bonds
33
Bearer Bond
Bond with coupons attached, no identification of the owner of the bond
34
The basis of a bond
Yield to maturity
35
Serial bonds are quoted based on
YTM (Yield to Maturity)
36
When is a bond callable?
When the zr or s has 2 dates after them EX: XYZ 8.5s31-37
37
Dilution
When the % ownership of each stockholder decreases
38
TIPS
Treasury Inflation Protected Securities that have fixed coupon rates and variable par values; based on inflation adjustment by GOV
39
Common stockholders can't vote for what?
Dividends
40
Safest security for a company to capitalize?
Common Stock
41
SEC Rule 147
Intrastate (single state) offerings are exempt from SEC registration. (securities) must be held in place of issuance for 6 months
42
SEC Rule 145
SEC regulates all new business made by mergers, spin offs, and acquisitions
43
Greensboro Clause
Overallment of new securities can be 15% if written on prospectus
44
Form 144 filings are valid for
90 days
45
Western Account
Account with divided liability and responsibility. Underwriters are not required to help other underwriters
46
Underwriting Agreement
Signed by the issuer and managing underwriter. Determines if it is a firm commitment or best efforts agreement
47
minimum % of revenue a company must generate from state of the offering to be eligible for Rule 147 exemption
80%
48
The redemption price of an open-ended fund?
NAV
49
Max % of NAV a no-load fund may charge annually in 12b-1 fees
0.25%
50
minimum % assets must be invested according to objs
80%
51
Interest received on municipal securities is
Federally tax free
52
If POP and NAV move in opposite directions...
its a close-ended fund
53
life cycle fund
determines what investments to purchase for retirement based on time horizon in the prospectus. aggressive in beginning conservative in the end.
54
Distributor
sponsor or managing underwriter of a mutual fund, usually pays for promotional expenses of mutual fund.
55
Redemption of mutual funds must be completed in
7 calendar days
56
How often is the death benefit of a variable life insurance policy calculated
annually
57
Conduit Theory
Means for an investment company to avoid taxes on net investment income distributed to shareholders. mutual fund acts as a conduit for distribution and is only taxed on income the fund retains.
58
Functions of a custodian bank of an investment company
Maintain stock and bond certificates custody of cash not invested
59
Money Market Funds
short-term Funds (usually 1 year or less) which have low price volatility (CDs T-bills) Provides check writing features
60
Variable life insurance policy
variable death benefit based on the performance of the separate account.
61
Universal life policy
allows flexibility in the timing and amount of premium payments.
62
Maximum length of an advisory contract for a manager of an investment company
2 years 1 year renewals after
63
What is the POP of a mutual fund
NAV + sales charge (if sales charge is given in $)
64
Blind Pool or Blank Check
hedge fund without an objective
65
What is a Breakpoint
The schedule of sales charge discounts mutual funds offer due to lump sum or cumulative investments
66
Sector Fund
buys common stocks in a specific industry
67
What is the Separate Account
Portfolio of a variable annuity chosen by the investor that determines the payouts received from a variable annuity
68
What are IDCs
Intangible Drilling Costs, required to be spent before drilling begins.
69
Loan Consent Agreement
allows a brokerage firm to lend a customers securities to a short seller, only margin agreement not needing to be signed by customer
70
minimum amount of equity for a day trading account
$25000
71
MIN maintenance requirement for a SHORT account
30% (any leverage increases this amount)
72
Pattern day trader
an investor who executes 4 day trades every 5 business days
73
MIN maintenance requirement for a LONG account
25% ( same leverage bullshiiii )
74
Credit agreement
investor is agreeing to interest charged on debit balance
75
SEC
Securities and Exchange Commission, regulates all exchanges and trading markets. anybody who anybody gotta register.
76
SRO
Self Regulatory Organizations, enforcing federal securities laws and supervises practices.
77
FINRA
Financial Industry Regulatory Authority, regulates all investment banking, over the counter markets, NYSE-listed, etc.
78
SIPC
Securities Investor Protection Corporation, non-profit that members pay into a general fund to protect customers in case of broker-dealer bankruptcy
79
Special Assessment bonds
muni bond issued to fund repairs within a portion of the municipality.
80
hypothecation
Securities bought on margin are used as collateral for the margin loan.
81
promotion sent to how many customers is considered correspondence
25 or less, doesn't need approval
82
how long is a customers account frozen for non sufficient funds
90 days
83
Contemporaneous trader
accusing insiders of insider trading can only accuse if selling while insider buys or vice versa.
84
T-bills maturity dates?
4,13,26,52 weeks
85
The Securities Act of 1933
law requires issuers to comply with a series of rules, including disclosing all material company information, in order to protect investors from fraud
86
What is shorting
Selling a stock that you dont own (borrow)
87
Form U-4
intro filing for registering reps, sent to CRD,needs: name address, alias 5 year residnecy history 10 year employment history any misdemeanors or felonies
88
Form U-5
used for Reps that are terminated or leaving, sent to the CRD if quitting send in 30 days if switching, send in 60 days of U-4 filing
89
max allowed contribution for a 55 year old to a Roth IRA
$7000 or 100% earned income, whichever is less
90
Money Purchase Plan
retirement plan that a Company will make a defined contribution for each employee regardless of profit or loss
91
Warrants
Certificate that gives the holder the right to buy common shares directly from a corporation at a fixed exercise price until the warrant expires, typically several years in the future.
92
if youre bullish an option you are
Holder, long, or Buying
93
If youre Bearish you are
Seller, Short, Writer

SIE EXAM (2 decks)

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