Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

SIE > Chapter one > Flashcards

Chapter one Flashcards

You may prefer our related Brainscape-certified flashcards:
SIE Exam flashcards
1
Q

The third market is the term used to described ___ and ___ listed securities trading _____.

A

NYSE, AMEX and over-the-counter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The new issue market is also known as the ____ market

A

Primary Market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a market maker?

A

A person who enters quotes and stands ready to buy and sell securities for his own account on a regular basis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the OTCBB

A

Over-the-counter Bulletin Board - provides electronic quotes for non-Nasdaq (OTC equity) stocks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

True or false: Unlike equities, bonds do not have organized exchanges

A

True. Unlike equity securities, corporate, municipal, and U.S. government bonds don’t have organized exchanges.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the role of a broker-dealer’s operations department?

A

To process paperwork, handle funds, and securities transfers, and settle and confirm transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What service does the Depository Trust and Clearing Corporation (DTCC) provides to its members?

A

Clearing, Settlement, and information services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

An RR employer is referred to as a ___

A

A RR’s employer is referred to as a broker-dealer (BD)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Define an introducing BD

A

A BD using another BD to handle cash and securities, trade execution, reporting, clearing, and confirmation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

List some examples of issuers

A

Corporations, the U.S Treasury, foreign governments, states, and other municipalities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

BD employees who are involved in the investment banking and securities business. are called ____

A

Registerest representatives (RR)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

True or false: An individual with a $100 million in assets is a QIB

A

False: even with $100 million in assets, individuals are not considered QIBs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Where can you find quotes for stocks not listed on an exchange or Nasdaq?

A

the OTCBB or Pink sheets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Identify the acronym: OTC

A

Over the counter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

True or false: Both stocks and bonds represent ownership in a corporation

A

False: bonds are debt instruments, while stocks represent ownership interest in a corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What does it mean to clear a trade?

A

It is the end-of-day process of matching trades executed by a BD to determine what is owed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Explain the primary market

A

The market on which new securities are offered

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Where may quotes for non-nasdaq (OTC equity) stocks be found?

A

Pink sheets or the OTC bulletin board

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

QIB stands for?

A

Qualified institutional buyer (QIB)

20
Q

Define a prime Broker

A

A BD that clears and settles trades effected by one or more executing brokers at the direction of the customer

21
Q

define the term broker

A

Any person engaged in the business of effecting transactions in securities for the account of others

22
Q

A BD that does not hold a customer’s cash or securities is known as a

A

Non-carrying firm

23
Q

What are the pink sheets?

A

a real-time electronic quotation system for the OTC equities

24
Q

List some responsibilities of a transfer agent

A

Issue and cancel securities, pay dividends and interest, mail shareholder reports, handle lost or stolen certificates

25
Q

What is the general definition of a QIB

A

An entity that owns and invests on a discretionary basis at least $100 million in securities of unaffiliated issuers

26
Q

explain a prime-brokerage arrangement

A

a situation in which multiple BDs execute a client’s trade and report them to one independent BD for settlement

27
Q

Which department of a broker-dealer handles the underwriting and issuance of securities for clients?

A

Investment banking

28
Q

For what types of securities is a trustee required?

A

Bonds

29
Q

List the two main types of secondary markets

A

Exchange markets (e.g. the NYSE or Nasdaq) and electronic nonexchange markets (e.g. the pink sheets or the OTCBB)

30
Q

A Nasdaq-listed stock trades in the ____ market

A

The secondary market

31
Q

A Nasdaq-listed stock trades in the ____ market

A

The secondary market

32
Q

What is an ECN?

A

Electronic communication network; any one of the several systems which permit the entry and dissemination of quotes

33
Q

Who can charge a client for buying or selling securities?

A

Only registered broker-dealers can levy transaction-based charges. Remember, investment advisers charge fees for advice

34
Q

what is the price at which a dealer is willing to sell?

A

The ask or offer price

35
Q

True or false: the offer(ask) is the price at which a broker-dealer is willing to buy shares from a customer.

A

False. The bid price is the price at which a firm will buy

36
Q

What is the price at which a dealer is willing to buy?

A

The bid price

37
Q

True or false: Nasdaq is a securities exchange registered with the SEC

A

True

38
Q

True or false: Nasdaq is a securities exchange registered with the SEC

A

True

39
Q

what is a clearing form?

A

A firm that is responsible for the efficient confirmation, settlement, and delivery of securities transactions

40
Q

Which market is the decentralized, negotiated market?

A

The over the counter market (OTC)

41
Q

to be considered an investment adviser, what are the three parts of the ABC test?

A

Advice
business
commissions

42
Q

to be considered an investment adviser, what are the three parts of the ABC test?

A

Advice
business
commissions

43
Q

Define the term dealer

A

A person engaged in the business of buying securities for, and selling securities from his own account

44
Q

Which department of a broker-dealer executes securities transactions?

A

Trading

45
Q

What is the federal law that governs investment advisers?

A

The investment advisers act of 1940

46
Q

What is the federal law that governs investment advisers?

A

The investment advisers act of 1940

SIE (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions