SIE EXAM STUDY GUIDE WITH COMPLETE SOLUTIONS

SIE EXAM STUDY GUIDE WITH COMPLETE SOLUTIONS Which shares of preferred stock may increase the most if the value of the co. common stock appreciates - Answer️️ -convertible preferred stock Convertible preferred stock can be exchanged for the common stock of the issuer. For that reason, if the common stock's value increases, the market value of the convertible preferred stock will also increase. Which of the following securities trades in fractional units of 1/32 of a point? - Answer️️ -Treasury Bonds Corporate and municipal bonds trade in increments of 1/8 of a point, while Treasury notes and Treasury bonds trade in increments of 1/32 of a point. A convertible bond is a type of corporate bond. During periods of rising interest rates, an investor can expect: - Answer️️ -Long term bond prices to fall more than short term bond prices Rising interest rates will result in the yields of bonds rising as well. Due to the inverse relationship between bond yields and bond prices, this will result in bond prices falling. TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 2/15 Since long-term bonds are exposed to this risk for a longer period, the prices of long- term bonds will fall more than the prices of short-term bonds. The Municipal Securities Rulemaking Board (MSRB) does NOT regulate which of the following? - Answer️️ -Municipal issuers The MSRB has the power to regulate municipal securities broker-dealers, their personnel, and their municipal securities communications with the public. However, the MSRB doesn't have the authority to regulate municipal issuers. A brokerage firm purchases 600 shares of stock from a customer and places the securities into its inventory. In this case, the firm likely acted as a(n): - Answer️️ - Dealer When a broker-dealer buys a security from a customer by using its own funds and places the securities into its inventory, it has acted as a dealer (principal). In this situation, the customer is charged a markdown on the transaction. If the firm bought the security for a customer or sold a security to a customer without being the other side of the transaction, it would be acting as a broker (agent) and it would charge the customer a commission. An underwriter assists an issuer in raising capital in the primary market by purchasing the securities from the issuer and selling them to customers. The firm that controls trading on an exchange for a specific stock is referred to as a designated market maker (DMM). TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 3/15 When warrants are issued, the exercise price is - Answer️️ -Higher than the current market price of the stock Warrants are typically issued with a strike price that's higher than the current market price of the stock (i.e., at a premium). Which is true - Answer️️ -sipc cover broker-dealer bankruptcy while the fdic covers bank deposits SIPC protects customers of a broker-dealer in the event the firm declares bankruptcy. However, the FDIC protects bank depositors in the event the bank cannot pay its banking customers. Which of the following choices has the lowest priority of claims in a bankruptcy - Answer️️ -common stock In the event a corporation goes bankrupt and it must liquidate its assets, secured bondholders or creditors would be paid first (secured b