100% CORRECT ANSWERS|LATEST
Regular Way Settlement for Equities - ANSWER T+2
The First Day that a Buyer Buys Stock Without a Dividend - ANSWER Ex-Dividend
date
The Last Day a Buyer Can Buy Stock and Receive the Dividend - ANSWER business
day before the ex-date
When Ex-Dividend Date Happens Relative to the Record Date for Regular Way Trades -
ANSWER 1 business day before
Fixed Rate Equity Security that Responds to Market Conditions like a Bond -
ANSWER Preferred Stock
Declaration Date - ANSWER date on which the board declares that a dividend will be
paid, when it will be paid (payable date), and the date an investor must be on the books to
receive the dividend (record date), and this announcement must be at least 10 business days
before the record date
Dividends in Arrears - ANSWER missed dividend payments
When Ex-Dividend Date Happens Relative to the Record Date for Cash-Settled Trades -
ANSWER the business day after the record date
1
,Adjustments to Price of a Security with Dividends - ANSWER on the morning on the
ex-date, the price of the security will fall by the amount of the dividend
Forward Stock Split - ANSWER more shares for a lower price each
Long-Term Capital Gains - ANSWER the profits from a sale of securities that have
been held by the investor for more than one year
Long-Term Capital Gains Taxation - ANSWER taxed at a preferential rate
Nominal Owner - ANSWER the registered or legal owner of the security in name
only, as another entity is the beneficial owner, retaining all rights of ownership
Proxy Statement - ANSWER disclosures sent to a company's shareholders prior to
corporate vote
Reverse Stock Split - ANSWER fewer shares for a higher price each
Rights - ANSWER provide shareholders with the ability to maintain their
proportionate ownership in a company if the company issues additional shares
Short-Term Capital Gains - ANSWER profits from the sale of securities that have
been held by the investor for one year or less
Short-Term Capital Gains Taxation - ANSWER taxed as ordinary income
Stock Dividend Taxation - ANSWER taxed upon the sale of the shares by the investor,
not taxed upon receipt
2
,Street Name - ANSWER a type of security registration in which the broker-dealer
maintains the customer's securities in the firm's name to allow for the ease of transfer when
securities are bought and sold
Transfer Agent - ANSWER in charge of recording changes in ownership of securities
and recording the names of registered security holders
Three Things a Company May Choose to Do with Treasury Shares - ANSWER 1. held
by company
2. reissued to the public
3. cancelled
Event that Turns Common Stock Shares Owned by the Public into Treasury Shares Held by
the Company - ANSWER company stock buyback (repurchase)
Filing Deadline for Form 10-K - ANSWER within 90 days of a company's fiscal year-
end
Purpose of Pre-Emptive Rights - ANSWER to avoid dilution
Price at Which Warrants are Issued - ANSWER with no intrinsic value, so the exercise
price is well below the current market value
The Entity that Issues and Cancels Stock Certificates and Processes Investor Mailings such as
Proxies - ANSWER transfer agent
The Entity Responsible for Holding Assets and Securities for the Protection of Investors, and
also for Maintaining Certain Investor Records - ANSWER custodian
3
, Impact of a Cash Dividend Received on a Common Shareholder's Cost Basis -
ANSWER nothing as cash dividends do not impact share cost basis they are taxable
as ordinary income
Order of Four Key Dates in the Dividend Payment Process - ANSWER 1) declaration
date 2) ex-dividend date 3) record date 4) payment date
Income Tax Treatment of Stock Dividend - ANSWER the investor's tax basis on each
share held is adjusted downward in proportion to the stock dividend
Equivalent of 100 Basis Points - ANSWER 1%
Regular Way Settlement for Corporate Bonds - ANSWER T+2
Regular Way Settlement for Municipal Bonds - ANSWER T+2
Regular Way Settlement for Agency Securities - ANSWER T+2
Frequency of Interest Payments to Bondholders - ANSWER semi-annual
Value of One Bond Point - ANSWER $10
Uses a 360-Day Year in the Calculation of Accrued Interest - ANSWER municipal and
corporate bonds
Highest Yield When a Bond is Trading at a Premium and is Callable -
ANSWER current yield
4
Regular Way Settlement for Equities - ANSWER T+2
The First Day that a Buyer Buys Stock Without a Dividend - ANSWER Ex-Dividend
date
The Last Day a Buyer Can Buy Stock and Receive the Dividend - ANSWER business
day before the ex-date
When Ex-Dividend Date Happens Relative to the Record Date for Regular Way Trades -
ANSWER 1 business day before
Fixed Rate Equity Security that Responds to Market Conditions like a Bond -
ANSWER Preferred Stock
Declaration Date - ANSWER date on which the board declares that a dividend will be
paid, when it will be paid (payable date), and the date an investor must be on the books to
receive the dividend (record date), and this announcement must be at least 10 business days
before the record date
Dividends in Arrears - ANSWER missed dividend payments
When Ex-Dividend Date Happens Relative to the Record Date for Cash-Settled Trades -
ANSWER the business day after the record date
1
,Adjustments to Price of a Security with Dividends - ANSWER on the morning on the
ex-date, the price of the security will fall by the amount of the dividend
Forward Stock Split - ANSWER more shares for a lower price each
Long-Term Capital Gains - ANSWER the profits from a sale of securities that have
been held by the investor for more than one year
Long-Term Capital Gains Taxation - ANSWER taxed at a preferential rate
Nominal Owner - ANSWER the registered or legal owner of the security in name
only, as another entity is the beneficial owner, retaining all rights of ownership
Proxy Statement - ANSWER disclosures sent to a company's shareholders prior to
corporate vote
Reverse Stock Split - ANSWER fewer shares for a higher price each
Rights - ANSWER provide shareholders with the ability to maintain their
proportionate ownership in a company if the company issues additional shares
Short-Term Capital Gains - ANSWER profits from the sale of securities that have
been held by the investor for one year or less
Short-Term Capital Gains Taxation - ANSWER taxed as ordinary income
Stock Dividend Taxation - ANSWER taxed upon the sale of the shares by the investor,
not taxed upon receipt
2
,Street Name - ANSWER a type of security registration in which the broker-dealer
maintains the customer's securities in the firm's name to allow for the ease of transfer when
securities are bought and sold
Transfer Agent - ANSWER in charge of recording changes in ownership of securities
and recording the names of registered security holders
Three Things a Company May Choose to Do with Treasury Shares - ANSWER 1. held
by company
2. reissued to the public
3. cancelled
Event that Turns Common Stock Shares Owned by the Public into Treasury Shares Held by
the Company - ANSWER company stock buyback (repurchase)
Filing Deadline for Form 10-K - ANSWER within 90 days of a company's fiscal year-
end
Purpose of Pre-Emptive Rights - ANSWER to avoid dilution
Price at Which Warrants are Issued - ANSWER with no intrinsic value, so the exercise
price is well below the current market value
The Entity that Issues and Cancels Stock Certificates and Processes Investor Mailings such as
Proxies - ANSWER transfer agent
The Entity Responsible for Holding Assets and Securities for the Protection of Investors, and
also for Maintaining Certain Investor Records - ANSWER custodian
3
, Impact of a Cash Dividend Received on a Common Shareholder's Cost Basis -
ANSWER nothing as cash dividends do not impact share cost basis they are taxable
as ordinary income
Order of Four Key Dates in the Dividend Payment Process - ANSWER 1) declaration
date 2) ex-dividend date 3) record date 4) payment date
Income Tax Treatment of Stock Dividend - ANSWER the investor's tax basis on each
share held is adjusted downward in proportion to the stock dividend
Equivalent of 100 Basis Points - ANSWER 1%
Regular Way Settlement for Corporate Bonds - ANSWER T+2
Regular Way Settlement for Municipal Bonds - ANSWER T+2
Regular Way Settlement for Agency Securities - ANSWER T+2
Frequency of Interest Payments to Bondholders - ANSWER semi-annual
Value of One Bond Point - ANSWER $10
Uses a 360-Day Year in the Calculation of Accrued Interest - ANSWER municipal and
corporate bonds
Highest Yield When a Bond is Trading at a Premium and is Callable -
ANSWER current yield
4
