SIE Exam QuickSheet 2024(100%
ACCURATE)
Types of Capital Markets: Primary - ANSWERinsurer sells securities to raise capital
Types of Capital Markets: Secondary - ANSWERtransactions between investors
Public securities offering - ANSWERsecurities sold to the general public
Private securities offering - ANSWERsecurities sold to private investors
primary offering - ANSWERproceeds go to the issuer
Initial public offering (IPO) - ANSWERan insurer's first distribution of securities to the public;
proceeds go to the insurer
Additional primary offering (APO) - ANSWERa distribution of securities to the public after an IPO;
proceeds go to the insurer
Split (combo) offering - ANSWERpart of the proceeds goes to the insurer and part goes to existing
stockholders
secondary offering - ANSWERproceeds go to existing stockholders
Market Centers: Exchanges - ANSWERphysical location, an auction market with designated market
markers, listed securities
Market Centers: Over-the-counter(OTC) - ANSWERdecentralized, trades between market markers
(dealers)
Market Centers: Third market - ANSWERexchanged-listed securities trading OTC
, Market Centers: Fourth market - ANSWERtrading between institutions via electronic communications
networks (ECNS)
Types of broker-dealers: carrying (clearing firm) - ANSWERcarries customer accounts; accepts funds
and securities
Types of broker-dealers: Introducing (fully disclosed) firm - ANSWERintroduces its customers to a
clearing firm
Equity: Common stock - ANSWERissued to raise capital; provides investor's growth
Equity: Preferred stock - ANSWERissued to raise capital; provides investor's income. Preferred share
types:
- straight (noncumulative): missed dividends are not payable
- cumulative: missed dividend (dividends in arrears and current preferred dividends must be paid
before common)
- Callable: issuer may buy back shares after a specified date at a specified price
- Participating: issuer may pay more than stated dividend
- Adjustable rate: dividend tied to another rate (example t-bill rate)
Equity: Rights and warrants - ANSWERRights: available to existing shareholders, short term, exercise
price below CMV. Opportunity for existing stockholders to maintain percentage of ownership
Warrants: offered with other securities, sold as units. long term, exercise price above CMV when
issued (anticipated value with time)
Equity: Real estate investment trusts (REITS) - ANSWER- traded on exchanges or OTC
- provide liquidity for real estate investors
Real Estate Investment Trusts - ANSWERClosed-end funds that invest in real estate and mortgages.
Debt Securities (Bonds): Bond Maturities - ANSWERTerm: entire issue matures on one date
Serial: issue matures over a period of years
ACCURATE)
Types of Capital Markets: Primary - ANSWERinsurer sells securities to raise capital
Types of Capital Markets: Secondary - ANSWERtransactions between investors
Public securities offering - ANSWERsecurities sold to the general public
Private securities offering - ANSWERsecurities sold to private investors
primary offering - ANSWERproceeds go to the issuer
Initial public offering (IPO) - ANSWERan insurer's first distribution of securities to the public;
proceeds go to the insurer
Additional primary offering (APO) - ANSWERa distribution of securities to the public after an IPO;
proceeds go to the insurer
Split (combo) offering - ANSWERpart of the proceeds goes to the insurer and part goes to existing
stockholders
secondary offering - ANSWERproceeds go to existing stockholders
Market Centers: Exchanges - ANSWERphysical location, an auction market with designated market
markers, listed securities
Market Centers: Over-the-counter(OTC) - ANSWERdecentralized, trades between market markers
(dealers)
Market Centers: Third market - ANSWERexchanged-listed securities trading OTC
, Market Centers: Fourth market - ANSWERtrading between institutions via electronic communications
networks (ECNS)
Types of broker-dealers: carrying (clearing firm) - ANSWERcarries customer accounts; accepts funds
and securities
Types of broker-dealers: Introducing (fully disclosed) firm - ANSWERintroduces its customers to a
clearing firm
Equity: Common stock - ANSWERissued to raise capital; provides investor's growth
Equity: Preferred stock - ANSWERissued to raise capital; provides investor's income. Preferred share
types:
- straight (noncumulative): missed dividends are not payable
- cumulative: missed dividend (dividends in arrears and current preferred dividends must be paid
before common)
- Callable: issuer may buy back shares after a specified date at a specified price
- Participating: issuer may pay more than stated dividend
- Adjustable rate: dividend tied to another rate (example t-bill rate)
Equity: Rights and warrants - ANSWERRights: available to existing shareholders, short term, exercise
price below CMV. Opportunity for existing stockholders to maintain percentage of ownership
Warrants: offered with other securities, sold as units. long term, exercise price above CMV when
issued (anticipated value with time)
Equity: Real estate investment trusts (REITS) - ANSWER- traded on exchanges or OTC
- provide liquidity for real estate investors
Real Estate Investment Trusts - ANSWERClosed-end funds that invest in real estate and mortgages.
Debt Securities (Bonds): Bond Maturities - ANSWERTerm: entire issue matures on one date
Serial: issue matures over a period of years
