SIE QUESTIONS & VALID COMPLETE
SOLUTIONS RATED 100% CORRECT
The SEC is a federal government agency responsible for all of the following, EXCEPT: CORRECT
ANSWER - Prosecute violators of criminal activity
- this is under the Department of Justice
The SEC is responsible for:
- creating/enforcing penalties for violation of federal securities law
- Protect US investors
- Require issuers to provide full and fair disclosure regarding their securities to investors
Which of the following is the exchange for options trading and the SRO for broker-dealers
engaging in the options market? CORRECT ANSWER - CBOE
- Chicago Board Options Exchange
BFDIC is associated with which of the following? CORRECT ANSWER - Protecting bank account
deposits in the US banks from bankruptcy
Following the execution of a trade, custody of client assets and securities are maintained by
a(n): CORRECT ANSWER - Clearing broker-dealer
The main objectives of the Securities Act of 1933 are to: CORRECT ANSWER - Provide full and
fair disclosures regarding new issues and to prevent misrepresentation and fraud in the sale of
securities
,When an issuer sells securities in a primary offering, the net proceeds are paid to the: CORRECT
ANSWER - Issuer
Which the following underwriting agreements guarantees the issuer of an initial public offering
(IPO) that all of the shares will be purchased? CORRECT ANSWER - Firm Commitment
Which of the following underwriting agreements allows an underwriter to step in, buy
remaining shares, and then sell those shares to the public? CORRECT ANSWER - Standby
The cooling-off period is a minimum of _____ days CORRECT ANSWER - 20
An investor owned a stock for 18 months before selling it to another investor. This trade placed
in the: CORRECT ANSWER - Secondary market
Which of the following is considered an electronic trading exchange in the First Market?
CORRECT ANSWER - NASDAQ
Who receives the net proceeds from securities that are sold in the secondary market? CORRECT
ANSWER - Investors
ABC is quoted at 15 - 16 what is the ask? CORRECT ANSWER - 16
Which of the following terms is NOT associated with the secondary market? CORRECT ANSWER
- Public offering price
- Only in the primary market
All of the following are contained in a confirmation statement, except: CORRECT ANSWER -
Profit or loss on the security position traded
, The primary reason investors buy stock in a corporation is to: CORRECT ANSWER - Financially
benefit if the share price increases
Which of the following has the lowest priority claim on assets if a corporation goes bankrupt?
CORRECT ANSWER - Common stockholders
What is the maximum loss for a corporation's stockholder? CORRECT ANSWER - The value of
the investment in the company
How many shares of stock are in a round lot? CORRECT ANSWER - 100
Which type of security must all corporations issue? CORRECT ANSWER - Common stock
All of the following are true regarding treasury stock, EXCEPT: CORRECT ANSWER - It has voting
rights
- Treasury stocks are authorized but not outstanding, does not receive dividends, and have been
issued and repurchased by the company
If XYZ Corporation issued 10 million shares of common stock and has 1 million in its treasury,
how many shares are considered outstanding? CORRECT ANSWER - 9 million = 10 million - 1
million
Outstanding Shares = Issued Shares - Treasury Shares
Which of the following is an arbitrary number used for accounting purposes? CORRECT ANSWER
- Par value
Which stock valuation method is determined by supply and demand? CORRECT ANSWER -
Market value
SOLUTIONS RATED 100% CORRECT
The SEC is a federal government agency responsible for all of the following, EXCEPT: CORRECT
ANSWER - Prosecute violators of criminal activity
- this is under the Department of Justice
The SEC is responsible for:
- creating/enforcing penalties for violation of federal securities law
- Protect US investors
- Require issuers to provide full and fair disclosure regarding their securities to investors
Which of the following is the exchange for options trading and the SRO for broker-dealers
engaging in the options market? CORRECT ANSWER - CBOE
- Chicago Board Options Exchange
BFDIC is associated with which of the following? CORRECT ANSWER - Protecting bank account
deposits in the US banks from bankruptcy
Following the execution of a trade, custody of client assets and securities are maintained by
a(n): CORRECT ANSWER - Clearing broker-dealer
The main objectives of the Securities Act of 1933 are to: CORRECT ANSWER - Provide full and
fair disclosures regarding new issues and to prevent misrepresentation and fraud in the sale of
securities
,When an issuer sells securities in a primary offering, the net proceeds are paid to the: CORRECT
ANSWER - Issuer
Which the following underwriting agreements guarantees the issuer of an initial public offering
(IPO) that all of the shares will be purchased? CORRECT ANSWER - Firm Commitment
Which of the following underwriting agreements allows an underwriter to step in, buy
remaining shares, and then sell those shares to the public? CORRECT ANSWER - Standby
The cooling-off period is a minimum of _____ days CORRECT ANSWER - 20
An investor owned a stock for 18 months before selling it to another investor. This trade placed
in the: CORRECT ANSWER - Secondary market
Which of the following is considered an electronic trading exchange in the First Market?
CORRECT ANSWER - NASDAQ
Who receives the net proceeds from securities that are sold in the secondary market? CORRECT
ANSWER - Investors
ABC is quoted at 15 - 16 what is the ask? CORRECT ANSWER - 16
Which of the following terms is NOT associated with the secondary market? CORRECT ANSWER
- Public offering price
- Only in the primary market
All of the following are contained in a confirmation statement, except: CORRECT ANSWER -
Profit or loss on the security position traded
, The primary reason investors buy stock in a corporation is to: CORRECT ANSWER - Financially
benefit if the share price increases
Which of the following has the lowest priority claim on assets if a corporation goes bankrupt?
CORRECT ANSWER - Common stockholders
What is the maximum loss for a corporation's stockholder? CORRECT ANSWER - The value of
the investment in the company
How many shares of stock are in a round lot? CORRECT ANSWER - 100
Which type of security must all corporations issue? CORRECT ANSWER - Common stock
All of the following are true regarding treasury stock, EXCEPT: CORRECT ANSWER - It has voting
rights
- Treasury stocks are authorized but not outstanding, does not receive dividends, and have been
issued and repurchased by the company
If XYZ Corporation issued 10 million shares of common stock and has 1 million in its treasury,
how many shares are considered outstanding? CORRECT ANSWER - 9 million = 10 million - 1
million
Outstanding Shares = Issued Shares - Treasury Shares
Which of the following is an arbitrary number used for accounting purposes? CORRECT ANSWER
- Par value
Which stock valuation method is determined by supply and demand? CORRECT ANSWER -
Market value
