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SIE SELF STUDY > 44%of Test Investment Products And Their Risks > Flashcards

44%of Test Investment Products And Their Risks Flashcards

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SIE Exam flashcards
1
Q

Which the following is true for debt instruments issued by the US treasury

A

All are issued in book entry form

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2
Q
  1. Hedge funds
A

Or non-regulated with no SEC registration required

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3
Q
  1. Once a dividend is initially declared by the Board of Directors any future dividend payments
A

Carry no guarantee of payment in any amount

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4
Q
  1. US government securities are
A

Issued by the US treasury inbook entry form

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5
Q
  1. And investor owns a bond purchased several years ago during 3%, which at the time was considered a fair return however he’s fixed 3% interest payments have not kept up with inflation rate the situation presents the investor with
A

Purchasing power risk

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6
Q
  1. Limited partnership programs are categorized as direct participation programs the term direct participation refers to the
A

Flow through profits and losses of the partnership to the individual limited partners

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7
Q
  1. A change to tax rate on dividends would be an example of
A

Legislative risk

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8
Q
  1. Investors face many different risks which of the following would be factors of systematic risk
A

War

And

Global security threats

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9
Q
  1. An investor anticipates that a fall in interest rates is eminent this investor not wanting to purchase bonds in order to lock in an interest income would likely buy
A

Non callable bonds

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10
Q
  1. Are purchased at a discount
A

T-bills

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11
Q

Purchased as a percentage of par

A

T-bonds

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12
Q

A municipality wants to issue GO bonds that will put it over it statutory limit they may do so as long as they have

A

Voter approval

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13
Q

T-notes pay interest

A

Semi annually

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14
Q

Penny stocks need what without what?

A

Risk disclosure

Without Suitability statement

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15
Q
  1. Bond prices have an inverse relationship to
A

Interest rates

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16
Q

A mutual fund has been in existence for 25 years . The prospectus must disclose the funds performance

A

Over the last 1, 5, and 10 years

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17
Q

LGIPs

A

Are not required to register with the SEC

Need no prospectus

What do you provide information statements which include details of the management fees

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18
Q

In bankruptcy proceedings courts protect both

A

Corporate and individual filers from creditors

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19
Q
  1. LGIPs are
A

Local government investment pools

Securities that are established for states to provide other government entities and short term investment

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20
Q
  1. The time to maturity for debt instruments
A

Can be any length of time

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21
Q
  1. A call or put that can be exercise before expiration is a
A

American style option

22
Q

Federal funds may be loaned from

A

One FRB MEMBER BANK TO ANOTHER

23
Q
  1. Intangible drilling costs are
A

Cost for those items that would have no salvage value at the end of the program

24
Q
  1. When investing in overseas markets in foreign securities investors should be aware of and understand
A

Currency risk

25
Q
  1. A restricted person would be allowed to purchase new shares at public offering price if only
A

The interest does not exceed 10%

26
Q
  1. Collateral trust bond
A

Corporate bonds back by the securities of other corporations

27
Q
  1. An income bond is
A

And adjustment bond and is unsecured

28
Q
  1. An individual owning shares of the corporation common stock would not be allowed to
A

Declare dividends

29
Q
  1. Serial maturity bonds
A

Are issued at one time and mature in successive years

30
Q

Is fixed at the time of a bond is issued

A

Nominal yield

31
Q
  1. A Shareholder owns preferred shares that allow for the possibility of receiving more than the stated dividend
A

Participating

32
Q
  1. If an investor is long an option contract and wishes to exercise the contract
A

Then the investor must notify the BD, then the BD must notify the OCC

33
Q

The decision to pay a dividend rests with

A

The BOD but is not guaranteed

34
Q

When a bond is priced at par value

A

It is trading at a premium

35
Q
  1. What two risks is an investor avoiding if their portfolio is made up of U.S. securities only
A

Political and currency

36
Q
  1. Revenue bonds are
A

Self supporting

37
Q
  1. GO Bonds are
A

Backed by the municipality’s good faith and credit

38
Q

Priority at dissolution for preferred shareholders means

A

After all creditors

And

Before common shareholders

39
Q
  1. Order of payment at the time of a corporate liquidation
A
  1. Employee wages and taxes owed
  2. Secured debt holders
  3. Subordinated debentures
  4. Preferred stock
40
Q

When a corporation issues a mortgage bond, the issues total value

A

Should be less than that of the real estate it is backed by

41
Q

Commercial paper is

A

Unsecured debt with a maximum maturity of 9 months

42
Q

For restricted stock or unregistered stock held by an affiliate or inside her which the following applies

A

Six month holding period With volume limits there after

43
Q
  1. When an investor purchases a corporate bond the investor it is
A

Lending money to and becoming a creditor of the corporation

44
Q
  1. A hedge fund portfolio has been characterized as being highly leveraged(borrowing to purchase) this means??
A

There is substantial borrowing or purchasing on margin

45
Q
  1. The coupon payable on a bond may also be referred to as
A

The stated or nominal yield

46
Q
  1. Yield to call (YTC) calculations reflected early redemption date and
A

Acceleration of the discount gain if the bond was originally purchased at a discount

&

Accelerated premium loss if the bond is originally purchased at a premium

47
Q
  1. Corporate Debentures are what?
A

Unsecured bonds backed by the good faith and credit of the issuing corporation

&

They are not secured by any underlying collateral

48
Q
  1. Under the provisional rule of 144, what percentage of outstanding stock may a control person sell every 90 days??
A

1%

49
Q
  1. Open-end investment companies trade new shares how much how often??
A

Unlimited

&

Continuously

50
Q
  1. Closed-end investment companies trade new shares how much how often?
A

Number of shares are fixed and once the IPO is over, the only way to acquire shares is in the secondary market

51
Q
  1. Both types of funds may operate as regulated investment companies and avoid taxation, both may choose to be diversified or not, and both offer a wide variety of investment objectives. What two types of funds fit this description??
A

Closed-end and Open-end

SIE SELF STUDY (18 decks)

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