Chapter 2 Terms (SIE Unit 10)

Question 1

Bankers Acceptances

Answer 1

Issued by banks on behalf of smaller companies with weaker credit

Question 2

Roles of Transfer Agents

Answer 2

Payers of cash distributions, handle stock splits, deal with mergers and acquisitions, mail annual reports, recover lost or damaged certificates

Question 3

Revenue Bond

Answer 3

When tolls collected are designated for repayment of interest and principal

Question 4

Dodd Frank Act of 2010

Answer 4

Passed as a direct result of the 2008 financial crisis

Question 5

Semi-Annual Coupon Payment Equation

Answer 5

(Principal * Inflation * Interest)

Question 6

Securities Exchange Act of 1934

Answer 6

Governs secondary market trading and established SEC

Question 7

Commercial Paper

Answer 7

Unsecured promissory note with a fixed maturity of usually less than 270 days; only issued by large companies

Question 8

Prepayment risk

Answer 8

Occurs when interest rates fall and homeowners refinance their mortgages

Question 9

Security

Answer 9

Intangible financial asset that may be bought, sold, or gifted between persons

Question 10

Securities Act of 1933

Answer 10

Governs primary market; Requires issuers to register their securities when selling to the public

Question 11

Investment Advisors Act of 1940

Answer 11

Governs which firms can charge for investment advice

Question 12

Blotter

Answer 12

Record of an original entry that reflects transactions as of a trade date

Question 13

Stock Record

Answer 13

Shows all securities held by the firm and who owns the securities

Question 14

How Long Firms Hold Record of Written Complaints

Answer 14

4 Years (According to FINRA)

Question 15

Functions of the Office of the Comptroller of the Currency

Answer 15

Ensure national banks and federal savings associations are operating soundly, provide fair access to financial services, treat customers fairly, and comply with the law

Question 16

Uniform Practice Code

Answer 16

Regulates interactions between broker-dealers

Question 17

Conduct Rules

Answer 17

Regulate broker-dealer’s relationship with the public

Question 18

SEC

Answer 18

Primary regulatory body for the securities industry

Question 19

Oversees trading in the over the counter market

Answer 19

FINRA

Question 20

Records kept for the life of the firm

Answer 20

Partnership agreement, corporate charter, stock certificate books, minutes, amendments, organizational records

Question 21

Records kept for six years

Answer 21

Blotters, general ledger, customer ledger, stock record, customer account records, designation of principals

Question 22

Records kept for four years

Answer 22

Written complaints

Question 23

Bodies regulated by the SEC

Answer 23

Broker-dealers, Exchanges, Securities information providers

Question 24

Body that cannot enforce MSRB rules

Answer 24

MSRB Enforcement Department

Question 25

BIGPLATE

Answer 25

Bankers, Incidental Services of Broker Dealers, Gov’t, Publishers, Lawyers, Accountants, Teachers, Engineers