Securities Industry Essentials (SIE) Exam Prep
Authorized Stock The approved number of shares a corporation may sell.
Issued Stock Authorized shares that have already been sold to investors.
Treasury Stock Previously issued shares repurchased by the company. Not outstanding, no
voting rights, no dividends.
Statutory Voting Shareholders receive one vote per share for each board seat.
Cumulative Voting Shareholders combine all votes and distribute them however they choose.
Warrants Equity securities allowing stock purchase. Not debt, no interest payments.
Forward Stock Split Shares increase, price decreases, total value remains unchanged.
Reverse Stock Split Shares decrease, price increases, total value remains unchanged. Increases
stock price to avoid delisting.
Blue Chip Stocks Large, stable companies with long histories of earnings and dividends.
Wilshire 5000 Tracks virtually all publicly traded U.S. companies.
Russell Top 50 Tracks the 50 largest U.S. companies within the Russell 3000.
Beta Measures volatility relative to market (1.0). >1 is more volatile, <1 is less volatile.
Cumulative Preferred Stock Missed dividends accumulate and must be paid before common stockholders
receive dividends.
Transfer Agent Responsible for issuing/canceling certificates and processing shareholder
mailings.
Custodian Safeguards investor assets and securities.
Cash Dividend Taxation Taxed as ordinary income; does not affect cost basis.
, Securities Industry Essentials (SIE) Exam Prep
Stock Dividend Taxation Not taxed when received; cost basis per share decreases.
Basis Points (bps) 1 basis point = 0.01%; 100 basis points = 1%.
Serial Bonds Portions of the bond issue mature at different dates.
Credit Ratings Measure bond credit quality and strongly impact liquidity.
Bond Premium Amortization Premium bonds gradually reduce cost basis toward par value over time.
Dated Date The date interest begins accruing.
Refunding Calling old bonds and issuing new lower-coupon bonds when rates fall.
Zero-Coupon Bonds No interest payments; purchased at deep discounts, mature at full face value.
EMMA Website Provides municipal bond information, credit ratings, and disclosures.
Bond Quotations Quoted as % of par. Corporate/Municipal: 1/8 increments. Treasury: 1/32
increments.
Debenture Unsecured corporate bond backed by company credit.
Convertible Bond Pricing Value is tied to the underlying stock price.
Non-Marketable Government Securities Cannot be resold. Example: Series I Savings Bonds.
Series I Bonds Feature a fixed rate and an inflation-adjusted rate.
New Treasury Securities Sold via Federal Reserve auction.
Industrial Development Revenue Bonds Municipal bonds issued for corporations; credit risk depends on the corporation.
Authorized Stock The approved number of shares a corporation may sell.
Issued Stock Authorized shares that have already been sold to investors.
Treasury Stock Previously issued shares repurchased by the company. Not outstanding, no
voting rights, no dividends.
Statutory Voting Shareholders receive one vote per share for each board seat.
Cumulative Voting Shareholders combine all votes and distribute them however they choose.
Warrants Equity securities allowing stock purchase. Not debt, no interest payments.
Forward Stock Split Shares increase, price decreases, total value remains unchanged.
Reverse Stock Split Shares decrease, price increases, total value remains unchanged. Increases
stock price to avoid delisting.
Blue Chip Stocks Large, stable companies with long histories of earnings and dividends.
Wilshire 5000 Tracks virtually all publicly traded U.S. companies.
Russell Top 50 Tracks the 50 largest U.S. companies within the Russell 3000.
Beta Measures volatility relative to market (1.0). >1 is more volatile, <1 is less volatile.
Cumulative Preferred Stock Missed dividends accumulate and must be paid before common stockholders
receive dividends.
Transfer Agent Responsible for issuing/canceling certificates and processing shareholder
mailings.
Custodian Safeguards investor assets and securities.
Cash Dividend Taxation Taxed as ordinary income; does not affect cost basis.
, Securities Industry Essentials (SIE) Exam Prep
Stock Dividend Taxation Not taxed when received; cost basis per share decreases.
Basis Points (bps) 1 basis point = 0.01%; 100 basis points = 1%.
Serial Bonds Portions of the bond issue mature at different dates.
Credit Ratings Measure bond credit quality and strongly impact liquidity.
Bond Premium Amortization Premium bonds gradually reduce cost basis toward par value over time.
Dated Date The date interest begins accruing.
Refunding Calling old bonds and issuing new lower-coupon bonds when rates fall.
Zero-Coupon Bonds No interest payments; purchased at deep discounts, mature at full face value.
EMMA Website Provides municipal bond information, credit ratings, and disclosures.
Bond Quotations Quoted as % of par. Corporate/Municipal: 1/8 increments. Treasury: 1/32
increments.
Debenture Unsecured corporate bond backed by company credit.
Convertible Bond Pricing Value is tied to the underlying stock price.
Non-Marketable Government Securities Cannot be resold. Example: Series I Savings Bonds.
Series I Bonds Feature a fixed rate and an inflation-adjusted rate.
New Treasury Securities Sold via Federal Reserve auction.
Industrial Development Revenue Bonds Municipal bonds issued for corporations; credit risk depends on the corporation.
