Securities 6

Question 1

Fill or Kill (FOK)

Answer 1

execute entire order immediately or cancel entire order

Question 2

Immediate or Cancel (IOC)

Answer 2

execute any portion available immediately

Cancel any balance remaining

Question 3

All or None (AON)

Answer 3

Execute all if available

If entire order can not be executed hold order as good till canceled (GTC)

Question 4

Markup Policy

Answer 4

Guide for listed and unlisted transaction charges

Applies to markups, markdowns, and commissions

Question 5

Order tickets

Answer 5

Approved by principal promptly after execution

Changes to tickets must be approved by a principal

Question 6

Order flow after execution

Answer 6

1. ) Order department or wire room: After execution order with trade details return to order department
2. ) Purchase and sales: issues confirmation with trade details to customer
3. ) Margin department: calculates any margin requirement due
4. ) Cashier: takes receipt and delivery of cash and securities

Question 7

Regular way (Corporate and municipal)

Answer 7

Trade date + 3 business days (T + 3)

Question 8

Regular way (Government)

Answer 8

Trade date + 1 business day (T + 1)

Question 9

Cash

Answer 9

Same day; BD approval required

Question 10

Receipt or delivery vs. payment RVP or DVP

Answer 10

Up to 35 calendar days

Question 11

Seller’s option

Answer 11

No sooner than first day after regular way (4th business day for corporate and municipal); no later than date specified in settlement contract

Question 12

Book value

Answer 12

Net worth - (preferred and intangibles)

Question 13

Working capital

Answer 13

CA - CL

Question 14

Current ratio

Answer 14

CA/CL

Question 15

Total capitalization

Answer 15

Long term debt + net worth

Question 16

Debt ratio

Answer 16

Long term debt/Total capitalization

Question 17

PE

Answer 17

CMV/EPS

Question 18

Dividend payout ratio

Answer 18

Common dividends/EPS

Question 19

Securities Act of 1933

Answer 19

Paper act, prospectus act

regulates new issues, requires registration of securities

Question 20

Securities and Exchange Act of 1934

Answer 20

People and places act
regulates BD and associated persons, requires registration
antifraud provision, defined inside information

Question 21

Trust Indenture Act of 1939

Answer 21

Applicable to corporate bond offerings of greater than $5 million in 12 months
Establishes a contract between the issuer and the trustee for the benefit of the bondholder

Question 22

Investment Company Act of 1940

Answer 22

Classified three types of ICs

Regulates ICs

Question 23

Investment Advisors Act of 1940

Answer 23

Requires the registration of investment advisors who charge fees for investment advice

Question 24

Securities Investors Protection Act of 1970

Answer 24

Protects customers from BD failure and insolvency up to a maximum limits for both cash and/or securities
Created the Securities Investors Protection Corporation (SIPC)

Question 25

Insider Trading and Securities Fraud Enforcement Act of 1988

Answer 25

Specifies penalties for inside trading and securities fraud

Question 26

The Employee Retirement Income Security Act of 1974 (ERISA)

Answer 26

Established to prevent abuse or misuse of pension funds
Applicable to private sector retirement plans
Mandates guidelines for plan; participation, funding, vesting, communication, nondiscrimination and beneficiaries