Knopman Marks SIE Exam Questions and Answers 100% Pass

1 Knopman Marks SIE Exam Questions and Answers 100 % Pass What is the sta ndard settlement period for equity transactions? ✔✔T + 2, which means the transaction settles two business days after the trade date. What is the term for the first day a stock is traded without its dividend entitlement? ✔✔ExDividend date . What is the final day a buyer can purchase stock to qualify for the upcoming dividend? ✔✔The business day immediately preceding the ex dividend date. How does the ex dividend date relate to the record date in the context of regular way tr ades? ✔✔It falls one business day before the record date. What type of equity security has a fixed rate and reacts to market changes similarly to a bond? ✔✔Preferred stock. 2 What is the term for the day when the board of directors announces a dividend, including its payment and record dates? ✔✔Declaration date, which must be announced at least 10 business days prior to the record date. What does "dividends in ar rears" refer to? ✔✔Unpaid dividend amounts that have been missed. How does the ex dividend date relate to the record date for cash settled trades? ✔✔It occurs the business day after the record date. What happens to the price of a secu rity on its ex dividend date? ✔✔The security's price will drop by the amount of the dividend on the morning of the exdividend date. What is a forward stock split? ✔✔A process where shareholders receive additional shares at a reduced price per share. 3 What constitutes long term capital gains? ✔✔Profits earned from selling securities held for over a year. How are long term capital gains taxed? ✔✔They are taxed at a favorable rate compared to ordinary income. Who is referred to as the nominal owner of a security? ✔✔The legal owner who is registered in name only, with another party being the actual beneficial owner. What is a proxy statement? ✔✔A document provided to shareholders containing information necessary for corporate voting. What is a reverse stock split? ✔✔A corporate action where fewer shares are issued at a higher price per share. What are rights in the context of stock ownership? 4 ✔✔They allow shareholders to maintain their proportional ownership if the company issues additional shares. What defines short term capital gains? ✔✔Profits from selling securities held for one year or less. How are s hortterm capital gains taxed? ✔✔They are taxed at the same rate as ordinary income. When are stock dividends taxed? ✔✔Taxation occurs when the investor sells the shares, not at the time of receipt. What does "street name" mean in ter ms of security registration? ✔✔A method where securities are registered in the broker dealer's name for convenience in transferring ownership. Transfer Agent ✔✔in charge of recording changes in owners hip of securities and recording the names of registered security holders