Securities and Corporate Capitalization Flashcards
What is the largest self-regulartory organization in the securities industry?
The Financial Industry Regulatory Authority (FINRA) is the largest self-regulatory organization (SRO) for all securities firms doing business in the US. The Securities & Exchange Commission (SEC) is the federal regulartor of the securities industry.
Which mutual fund might be suitable for generating tax-exempt income?
A Municipal Bond fund is the only fund that offers tax-exempt income.
What are the two ways companies can raise capital?
- Issue Stock
2. Issue Debt
What are the three things to remember about issuing stock?
- Ownership (equity)
- Limited liability
- Conservative for issuer
What are the three things to remember about issuing debt?
- Holder of note or bond is a creditor of corporation.
- Bonds & Notes are senior to equity securities in
the event of liquidation. - Conservative for the investor.
What are the two types of debt securities?
Bonds and Notes
What is the one security all corporations must issue?
Common Stock
What type of stock is considerered “most junior securtiy”?
Common Stock
As a series 6 registered representative, what market are you restricted from?
You can not trade in the secondary market.
What is the trade date?
The date the trade is requested.
What is the settlement date
The date the trade settles.
How can a trade be settled? (purchased)
- Cash Settement
2. Regular Way
Define a Cash Settement
Trade today, pay today, own it today.
Define a Regular Way settelment
T + three business days. No weekends or holidays.
Define a Regulation T-FRB settlement
Credit is extended from the broker/dealer to the customer. two business days after regular way settlement date (T+3 days) (S+2)
