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SIE SELF STUDY > 2nd 100 Pages > Flashcards

2nd 100 Pages Flashcards

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SIE Exam flashcards
1
Q

Intrinsic value

A

The potential profit available when exercising an option “call up”

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2
Q

At the money

A

Phrase used when the option on the underlying stock is trading at the exercise price of the option

CMV- 70
- same
BUY- 70(SP)

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3
Q

Time Value of Money (TV)

A

P= IV + TV

For example;

CMV=100

              Buy 95 Call @ 5
                                             What’s the TV?

A. In the money b/c call says if the SP

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4
Q

Parity

A

When the intrinsic value equals the premium

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5
Q

Time Value

A

Premium- intrinsic value

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6
Q

Premium

A

Intrinsic value + Time Value

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7
Q

Buyers have …

A

Rights

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8
Q

Sellers have…

A

Obligations

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9
Q

Index and foreign currency options are…

A

Cash Settled

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10
Q

Hedge with your…

A

Fear

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11
Q

The best options when hedging is to…

A

Buy or long a put

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12
Q

For protection you…

A

Buy

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13
Q

For income you…

A

Sell

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14
Q

A short sell is?

A

Open

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15
Q

A long buy is?

A

Open

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16
Q

A long sell is?

A

Closed

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17
Q

A short buy is?

A

Closed

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18
Q

Under OCC EXPIRATION=

A

11:59 pm ET on Saturday after third Friday

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19
Q

Growth and income

A

Combination fund

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20
Q

Specialized fund

A

Sector fund

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21
Q

Index Funds

A

Low Fees + high diversification

Like S&P

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22
Q

Global Funds

A

U.S.

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23
Q

International Funds

A

Non U.S.

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24
Q

Inverse Funds (short or reverse Funds)

A

Hedge for mutual funds

Opposite

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25
Q

ETFs

    EXCAHNGE TRADED FUNDS
A

Continuous pricing

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26
Q

Mutual funds

A

Price once per day

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27
Q

ETNs

    Exchange traded notes

              DEBTS
A

BANK

NO INTEREST

NO Principal protection

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28
Q

Maximum sales charges

A

8 1/2% of the pop

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29
Q

Dollar cost averaging

A

Average cost lower than average price

Same amount into the same funds over a period of time

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30
Q

Alternative investments

A

Direct

Participation

Programs

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31
Q

Oil drilling

A

Intangible drilling costs generate immediate deductions

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32
Q

Oil and gas programs

A

Exploratory also known as wildcatting

High risk and reward

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33
Q

REITs

A

Real estate investment trusts

75% invested in real estate

Rental income

Capital gains

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34
Q

Beta measures what?

A

Systematic risk

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35
Q

Interest rates go up

A

Bonds go down

36
Q

The higher the duration

A

The more volatile

37
Q

Bonds have the most?

A

Inflation risk

38
Q

The better the grade/credit

A

The less default risk

39
Q

Leverage

A

Too much debt

40
Q

Legislative or political risk

A

Risk foreign investors will lose money due to changes in a country‘s government

41
Q

An investor currently owns $100,000 of US treasury bonds maturing in 12 years. The most significant risk facing this client is?

A

Interest rate risk

42
Q

Cooling off period

A

20 day minimum

43
Q

Preliminary prospectus

             RED HERRING
A

Missing final affective date and final price

44
Q

The primary difference between an underwriting syndicate and a selling group is?

A

The syndicate assumes liability for unsold shares

The selling group does not

45
Q

Prospectus delivery

A

With or before delivery of final confirmation.

Can NEVER be marked on

46
Q

Disclosure document

A

Offering circular

47
Q

Regulation D

A

Private placements

48
Q

Rule 144

A

Sale of control and restricted securities

Sets the conditions under restricted unregistered securities sold or resold

49
Q

RULE 144 A

A

To provide a mechanism for the sale of privately place securities that do not have or not require an SEC registration in place

50
Q

RULE 145

A

Aims to protect stockholders of any company that proposed to re-organize its ownership structure

51
Q

What risk cannot be reduced by diversifying in equity portfolio??

A

Market risk

52
Q

Stop orders

A

These are nets to catch the limit of loss

53
Q

The securities exchange act of 1934

A

Regulates secondary trading created securities and exchange commission (SEC)

54
Q

Slobs

A

Buy calls

55
Q

Bliss

A

Buy puts

56
Q

Floor brokers determine what?

A

Time and price of trades

57
Q

Who has to sign the new account form?

A

Only the principal

58
Q

Reg T

A

Gives the FRB the authority

59
Q

Who’s social is used when you doUGMA OR UTMA account??

A

The minors Social Security number

60
Q

Update amend alter change

A

30 days

61
Q

How long should member firms retain records of any customer account?

A

At least 6years after it is closed

62
Q

Regulation T

A

A rule that applies to transactions that occur in both cash and margin accounts

SIPC only protects the individual equities

63
Q

Customer delivery on sales

A

Requested by settlement date

Required within 10 business days

64
Q

Regular way settlement for US government bonds is

A

Next business day

                     T+1
65
Q

Regular way settlement for municipal bonds

A

T+2

66
Q

Regular way settlement for corporate bonds

A

T+2

67
Q

Tracking executed trades registered reps should

A

Always go to the supervisor/broker dealer or principal first

68
Q

Due bills

A

Someone paid your dividend for you

69
Q

FIFO

Capital gains

A

Most detrimental to customer

70
Q

Progressive taxes

A

Gets higher the more money you make

71
Q

Regressive taxes

A

Charged equally regardless of income

72
Q

LIFO

A

Annuities and non-qualified plans

73
Q

FIFO

A

IRS DEFAULT

74
Q

Capital gains

A

Mutual funds

Stocks

Real estate

REITS

Securities

75
Q

Qualified plans

A

Ordinary income tax

Individual

IRA

Earnings grow tax-deferred

Premature withdraw 10% penalty before 59 1/2

76
Q

No SMUT trading allowed for retirement plans

A

Short

Margin

Uncovered

Tangibles

77
Q

What’s the max amount of employees for a simple plan?

A

100

78
Q

Securities act of 1933

A

Paper prospectus primary act

Regulation of new issues

79
Q

Securities exchange act of 1934

A

People and places act

80
Q

Excessive trading while ignoring clients objectives and interest

A

Churning

81
Q

The investment advisors from act of 1940

A

RIA

A B C

ADVICE. BUSINESS. COMPENSATION.

82
Q

Insider trading act of 1988

A

Civil penalties greater of 1 million or three times profit

Criminal penalties up to 5 million and up to 20 years jail sentence

83
Q

Telephone consumer protection act of 1991 administered by FCC

A

Time restrictions include 8 AM to 9 PM local time

84
Q

Regulation national market system

A

Broad sweeping regulation in acted to bring trading in trade reporting uniformity to US securities markets

85
Q

Maloney act of 1938

A

Created SROs

86
Q

Pegging

A

Preventing the stock from moving either direction

SIE SELF STUDY (18 decks)

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