Chapter 1 Part 1 Flashcards

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1
Q

Blue-Sky Laws

A

speculative schemes which have no more basis than so many feet of blue sky

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2
Q

Securities Act of 1933

A

the first federal legislation to regulate these markets

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3
Q

exempt

A

A person and/or a security will be classified as exempt if not required to register with a regulator.

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4
Q

nonexempt

A

A person and/or security that is nonexempt is not exempt from registration. In other words, the person or security is required to register with a regulator.

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5
Q

person or a security is required to register at the state level

A

follow the rules, regulations, and guidelines of the Uniform Securities Act (USA).

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6
Q

Federal registration

A

require that documents be filed with the Securities and Exchange Commission (SEC).

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7
Q

A security includes, but is not limited to,

A

common stock, bonds, option contracts, and variable annuities.

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8
Q

A person is defined as

A

any legal entity that is not deceased, is not a minor, and is not mentally incompetent.

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9
Q

Under the Uniform Securities Act, the term person can include

A

individuals, corporations, partnerships, sole proprietorships, issuers, and state Administrators (both the office and the individual).

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10
Q

An issuer is

A

any person who issues or proposes to issue any security.

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11
Q

The term issuer includes

A

the U.S., state, local or foreign governments, corporations, and partnerships.

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12
Q

A broker-dealer (BO) is

A

any legal person in the business of effecting transactions in securities for the accounts of others or for its own account

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13
Q

A firm is acting in the capacity of a broker

A

when effecting securities transactions on behalf of its clients.

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14
Q

In other words, a broker will locate the

A

other side of the trade–finding the buyer when representing the seller, or finding the seller when representing the buyer.

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15
Q

Brokers charge their customers

A

a commission for providing this service.

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16
Q

A firm is acting in the capacity of a dealer when

A

effecting securities transactions for its own account.

17
Q

A dealer stands ready to

A

take the other side of any transaction–buying for its own inventory with a markdmvn or selling from its own inventory and charging a markup.

18
Q

market maker

A

A dealer providing liquidity by publishing quotes in the Nasdaq marketplace

19
Q

Agents are

A

individuals who represent a person in effecting securities transactions

20
Q

The USA identifies two different types of agents

A

one who represents a broker-dealer and one who represents an issuer of securities.