Module 3: Fundamentals of Securities Regulation Flashcards
Mr. X resigned and moved to another company. What should Mr. X do before he starts to trade in his new company?
I. Inform SEC that he is resigning
II. Check if company B is SEC accredited
III. Check if his license is still valid
IV. Check if company B is a member of the exchange
A. I and II
B. II and III
C. I, II and III
D. All of the above
D. All of the above
In financial statement reporting, which of the following serves as a guideline?
A. SRC rule 68, as amended
B. ICA
C. Both a and b
D. None of the above
C. Both a and b
Under SRC, exempt transactions include the following:
I. Distribution of stock dividends
II. Equity securities of stock dividends
III. Issuance of securities pursuant to merger
IV. Sale by a trustee in bankruptcy
A. II and IV only
B. I and III only
C. I, II and III only
D. All of the above
C. I, II and III only
Which BEST describes a firm commitment?
A. An underwriter’s agreement to assume all inventory risk and purchase all securities
B. An underwriter’s promise to maximize his/her effort to sell as much of a securities offering
C. An offer to purchase some or all of shareholders’ shares in a corporation
D. None of the above
A. An underwriter’s agreement to assume all inventory risk and purchase all securities
Which are considered securities?
A. Trust Certificates
B. Derivatives
C. Both
D. None of the above
C. Both
A broker learned from his source that the price of a stock might go down so he called his client but to no avail. What will he do?
A. Redeem stock and put in an interest bearing account
B. Redeem stock and write an explanation to client
C. Both
D. Nothing
D. Nothing
Which of the following statements are TRUE regarding features of a Treasury Bill:
I. Short term money market instrument
II. Issued at a discount, redeemed at par
III. Day count is at 360 days
IV. The tenor of T-bills are completed upon 91 days, 181 days and 364 days
A. I and II
B. I, II and III
C. I, II and IV
D. I and III
B. I, II and III
Broker dealer has the blanket authority to buy on the account of owner’s behalf:
A. Directional Account
B. Discretionary Account
C. Disclosure Account
D. None of the above
B. Discretionary Account
A form of market manipulation that engages in a series of transactions in securities that are reported publicly to give the impression of activity or price movement in a security.
A. Squeezing the float
B. Hype and dump
C. Painting the tape
D. Marking the close
C. Painting the tape
Who is not required to provide customer identification?
A. Individual who buys and sells stocks
B. Broker firm, who performs transactions on behalf of individuals
C. Beneficiary of trust
D. All of the above
C. Beneficiary of trust
The following are considered money market instruments except:
A. Commercial papers
B. Treasury bonds with five (5) months to maturity
C. Repurchase agreements
D. Treasury notes with four (4) years maturity
D. Treasury notes with four (4) years maturity
They give financial advice to help the corporation determine: how much money it needs; should money be raised through issuance of securities; if so, what type of securities and when should the securities be offered for sale.
A. Broker
B. Dealer
C. Market Maker
D. Investment Banker
D. Investment Banker
