SIE Mastery Exam 1 Review Questions

"The average daily rate charged by member banks for overnight loans of reserves" best describes the: - Federal Funds Rate A 5-year 3 1/2% Treasury Note is quoted at . The note pays interest on Jan 1st. and Jul. 1st. Which statement is TRUE regarding these T-Notes? - The trade will settle in Fed Funds and interest accrues on an actual day month / actual day year basis A bond counsel would render an unqualified legal opinion in which of the following circumstances? - Underwriters for the issue have not complied with MSRB disclosure requirements in connection with the sale of the issue A buy stop order is executed in: - rising markets at the market price A call premium on a bond is the: - amount by which the redemption price prior to maturity exceeds par A corporation has issued 8% AA rated sinking fund debentures at par. Three years later, similar issues are being offered in the primary market at 7%. Which statement is TRUE about the outstanding 8% issue? - The dollar price of the bond will be at a premium to par and the current yield will be lower than the nominal yield A customer buys 100 shares of preferred at $101 per share. The par value is $100. The dividend rate is 8%. Each dividend payment will be: - $400 A customer buys a $1,000 par Treasury Inflation Protection security with a 4% coupon and a 10 year maturity. If the inflation rate during the first year of the security's life is 5%, the: - principal amount is adjusted to $1,050 and the coupon rate remains at 4% A customer has bought a fully registered Exxon-Mobil debenture. The customer will receive interest payments: - from the paying agent twice a year. A customer is 100% invested in an S&P 500 Index Fund. This portfolio has: - systematic risk A customer owns 256 shares of ABC common stock. ABC declares a rights offering, with the terms being that for every 15 rights tendered, a shareholder may purchase one additional share at $24 per share. Any fractional rights holding may be rounded up to buy an additional share. If this shareholder wishes to subscribe, which statement is TRUE? - The shareholder can buy a maximum of 18 shares by paying $432