Chapter one

Question 1

SRO

Answer 1

Self Regulatory Organizations: NASD, FINRA

Question 2

FINRA

Answer 2

financial Industry Regulatory Authority

Question 3

CBOE

Answer 3

Chicago Board option Exchange:
Is the examining authority for broker-dealer engaging in the option market.

Question 4

MSRB

Answer 4

Municipal Securities Rulemaking Board:
It is the SRO that regulates the broker-dealers and banks that engage in municipal securities business.

Question 5

Which of the following is exchange for option trading and the SRO for broker-dealer engaging in the option market.
1 FINRA
2 SEC
3 MSRB
4 CBOE

Answer 5

CBOE

Question 6

FDIC

Answer 6

Federal Deposit Insurance Corporation:
it is an independent federal agency protecting bank account in the U.S. banks from bankruptcy. It provides $250000. of insurance per person per bank.

Question 7

The Federal Reserve

Answer 7

It acts as a central bank of U.S. The FED is governed by the Federal Reserve Board.

Question 8

FRB

Answer 8

Federal Reserve board. It regulates short term supply of money and credit in the united states.

Question 9

Department of treasury

Answer 9

It is executive agency responsible for promoting economic prosperity and ensuring the financial security of the united states.

Question 10

North American Security Administrators Association

Answer 10

It is responsible for creating, updating and maintaining the state licensing exam.

Question 11

USA

Answer 11

Uniform Security Act: Set of security laws used to establish uniform securities registration standards and laws at state level.

Question 12

NASAA

Answer 12

Also creates Model Rules under uniform Securities Act and issues statements of policy to help interpret the act.

Question 13

What are states security laws referred to as

Answer 13

Blue sky laws.

Question 14

The FDIC is associated with which of the following?
a: serving as the central bank of US.
b: Enforcing the blue sky laws
c: Protecting bank accounts deposits in US banks from bankruptcy
d: ensuring the financial security of the united states.

Answer 14

C: Protecting bank accounts deposits in US banks from bankruptcy

Question 15

Person

Answer 15

Legal entity that can transact securities (market participants included)

Question 16

Stock

Answer 16

security that represents ownership,

Question 17

Bond

Answer 17

It is debit security and represents relationship of creditor and issuer

Question 18

Mutual Funds

Answer 18

Pooled investments that can hold a Varity of stocks, bonds, and other securities.

Question 19

Security exchange

Answer 19

Auction market where securities can be bought and sold. It has listing requirement that issuers must meet.

Question 20

Over the counter (OTC) Market

Answer 20

Negotiated market where unlisted securities are bought and sold.

Question 21

Retail Investor

Answer 21

AN individual that purchases securities for their own account. (General public).

Question 22

Institutional Investor

Answer 22

Makes securities on large scale for their accounts or for institutional clients. Insurance, investments comp, trusts, broker acct, employee benefit plans.

Question 23

QIB

Answer 23

Qualified institutional buyer: an institutional investor that owns and invests a minimum of $100 million in securities on a discretionary basis.

Question 24

Issuer

Answer 24

legal entity that offers securities to public.

Question 25

Underwriter or investment banker

Answer 25

Security broker dealer that administers the public issuance and distribution of securities for a corporation.

Question 26

Custodian

Answer 26

Safe Guards cash, securities and hired by the issuer.

Question 27

Trustee

Answer 27

hired by bound issuers to protect the bondholders` interest.

Question 28

Transfer agent:

Answer 28

A firm that performs all recordkeeping and customer service functions, processes name and address changes and keeps track of the number of shares owned by each investor.