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Securities Exam > Chapter 1 - Market Participation and Market Structure > Flashcards

Chapter 1 - Market Participation and Market Structure Flashcards

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SIE Exam flashcards
1
Q

A customer has an account with a discount broker-dealer that specializes in online trading. If the customer is being charged a commission, the firm is MOST likely acting in what capacity?

A

Agent capacity

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2
Q

The market makers for stocks that are not listed on either the NYSE or Nasdaq:

A

The Pink Marketplace

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3
Q

The market in which an issuer raises capital by selling its securities to investors is referred as the:

A

Primary Market

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4
Q

A quotation system for securities that are not listed on either the NYSE or Nasdaq

A

The OTCBB (Over-the-Counter Bulletin Board)

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5
Q

Which of the following organizations provides clearing services for equity securities?
A) The National Securities Clearing Corporation (NSCC)
B) The Fixed Income Clearing Corporation (FICC)
C) The Options Clearing Corporation (OCC)
D) A transfer agent

A

A) The National Securities Clearing Corporation (NSCC)

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6
Q

If ABC Brokerage purchases 600 shares of stock from a customer and places the securities into its inventory, it likely acted as a(n):

A

Dealer

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7
Q

A broker-dealer is clearing its trades through another broker-dealer but is not disclosing specific information regarding its clients. Who is responsible for maintaining the account records?

A

The introducing broker-dealer

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8
Q

Securities listed on an exchange, but not traded in the OTC market BEST describes:

A

the third market

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9
Q

The department of a brokerage firm that advises a corporation regarding the structure and timing that also helps with the underwriting.

A

Investment banking

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10
Q

A broker-dealer acting in an agency capacity will charge customers a:

A

commission

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11
Q

A ____ receives a commission.

A

broker

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12
Q

When an issuer is borrowing money, it is called:

A

debt

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13
Q

A ____ charges a fee.

A

Investment Advisor

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14
Q

A ____ maintains an inventory of securities.

A

market maker

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15
Q

Representation of ownership in a corporation is known as:

A

equity

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16
Q

To be an accredited investor, an individual must have a net worth of _____ or annual income of _____.

A

$1,000,000; $200,000

17
Q

A qualified institutional buyer cannot be a:

A

natural person

18
Q

A qualified institutional buyer must own and invest a minimum of:

A

$100 million

19
Q

An issuer may hire a(n) _____ to assist in selling its securities publicly to raise capital.

A

underwriter

20
Q

The _____ market is where issuers raise money by selling securities to the public.

A

primary

21
Q

The _____ market is where the trading of existing securities between investors occur.

A

secondary

22
Q

Registered exchange with an unlimited number of market makers.

A

NASDAQ

23
Q

Market makers stand ready to buy or sell securities at their quoted prices, while _____ execute trades for the firm’s clients.

A

traders

24
Q

_____ stand ready to buy or sell securities at their quoted prices, while traders execute trades for the firm’s clients.

A

Market makers

25
Q

A transaction executed directly between two institutions is considered a _____ market trade.

A

fourth

26
Q

(True or False) The clearing firm must maintain all client information for a fully disclosed account.

A

True.

27
Q

(True or False) Specific client information is held by the clearing firm in an omnibus account.

A

False.

28
Q

(True or False) The executing firms are subject to counterparts risk when clearing trades through the DTCC.

A

False.

29
Q

(True or False) The Options Clearing Corporation only works with broker-dealers

A

True.

30
Q

The buyer for all sellers and the seller for all buyers is the:

A

Options Clearing Corporation

31
Q

When trades from multiple firms clear and settle through one firm it is know as a:

A

prime brokerage

32
Q

Clearing firm that is responsible for individual client information.

A

Fully-disclosed

33
Q

Introducing firm is responsible for individual client information is known as:

A

Omnibus account

Securities Exam (20 decks)

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