Equities

Question 1

Do holders of preferred stock ever receive rights?

Answer 1

No

Only common stock receives rights (always 1 right per share of common)

Question 2

A representative enters a customer’s immediate-or-cancel (IOC) order to sell 1,000 shares at $12. If only 500 shares can be sold at $12, what will happen?

Answer 2

500 shares will be sold at $12; the remainder of the order will be canceled unexecuted.

An IOC order will take a partial fill. Time is the limiting factor in an IOC.

Question 3

Will an immediate or cancel (IOC) order take a partial fill?

Answer 3

Yes

An IOC order will take a partial fill. Time is the limiting factor in an IOC.

Question 4

If a certificate is in the name of “Smith and Company”, what are the 3 ways in which it may be signed?

Answer 4

Smith & Company, Smith & Co., or Smith and Company.

Corporate signers are the exception to the general rule that endorsement of a certificate must match exactly the name on the front. The word and may be substituted with an ampersand (&) and the word company may be abbreviated.

Question 5

If meeting a maintenance call with securities, must deposit ___% of the call amount

Answer 5

200%

Must deposit securities worth twice the value of the call

Question 6

Ex dividend date (Ex date)

Answer 6

Day stock starts trading without dividend

Question 7

What kind of order types are reduced on the ex date when there is a dividend?

Answer 7

Buy limits
Sell stops

(Below the current market price)

Question 8

When stock is sold, how much of the balance goes to SMA?

Answer 8

50%