Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Securities Industries Essentials > Unit 2.1 > Flashcards

Unit 2.1 Flashcards

1
Q

What type of dividends are distributed by check or automatically deposited into a brokerage account to shareholders?

A

Cash dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are some of the characteristics of Authorized but unissued stock?

A

Authorized but unissued stock does not carry the rights and privileges of issued shares and is not considered in determining a company’s total capitalization

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How is a corporation’s market cap determined?

A

Multiplying the number of outstanding shares by the current market value of a share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Who does cumulative voting benefit?

A

Smaller investors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is an unlisted (not listed on a U.S stock exchange) security trading at less than $5 per share?

A

Penny stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is treasury stock?

A

Stock a corporation has issued and subsequently reacquired

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the number of shares a company is authorized to issue according to their corporate charter?

A

Authorized stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How can outstanding stock be no longer outstanding?

A

If the company gets the shares back

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the payable date?

A

The date an agent sends dividend checks to all stockholders whose names appear on the books as owners as of the record date

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the date of the cutoff for customers to receive dividends?

A

Ex-dividend date

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Debt is another term for_____?

A

Bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What type of dividends are issued in the form of a sample of the company’s product?

A

Product dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What voting system benefits smaller investors?

A

cumulative voting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Equity is another term for_____?

A

Stocks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are cash dividends?

A

Dividends distributed by check to shareholders, typically paid quarterly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the Ex-dividend date?

A

The cutoff for customers to receive dividends. Is also the same day as the record date

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the SEC rules regarding Penny Stock Cold-calling?

A
  1. The solicitor (representative of BD) must first determine suitability on the basis of information about the buyer’s financial situation and objectives
    2.The customer must sign and date this suitability statement
  2. The BD must disclose the name of the penny stock, the number of shares to be purchased, a current quotation, the amount of commission that the firm and the representative received
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are Mid-cap stocks?

A

Stock of companies that are not as big as large-cap stocks and are too big to be small-cap. As such they tend to reflect characteristics of both small and large caps

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the declaration date?

A

The date a company’s BOD approves a dividend payment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What must a BD’s monthly account statement to a customer holding penny stocks contain?

A

The market value and number of shares for each penny stock held in the account and the issuer’s name

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What does not carry the rights and privileges of issued shares and is not considered in determining a company’s total capitalization?

A

Authorized but unissued stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is a penny stock disclosure document?

A

A document that fully describes the risks associated penny stock investments required to be given to a customer conducting their initial penny stock transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

How are qualified cash dividends taxed?

A

Depends on the investor’s income tax bracket. The higher the income tax bracket, the higher the tax on qualified dividends will be, up to the specified maximum. Which has historically been lower than the investor’s ordinary tax rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What are stocks of large-cap companies that have a long history of steady dividend payments known as?

A

Blue-chip stocks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
What is the record date?
The date on which you must be a stockholder to receive in order to receive a stock's dividends. Is also the same day as the ex-dividend date
26
What is issued stock?
Authorized stock that has been sold to investors
27
What is a dividend?
Dividends are distributions of a company's profits to its shareholders. Investors who buy stock are entitled to dividends if and when the BOD votes to make such distributions.
28
What are shares that a company has issued and that are in the hands of investors?
Outstanding stock
29
What dividends are taxed at the investor's ordinary income tax rate?
Nonqualified cash dividends
30
What does the SEC require before a customer completes their initial transaction of a penny stock?
That the customer receive A copy of a risk disclosure document, and that the member receive a signed and dated acknowledgment from the customer tat the document was received
31
What is another term for stocks?
Equity
32
What is authorized stock that has been sold to investors?
Issued stock
33
What is authorized stock?
The number of shares a company is authorized to issue according to their corporate charter
34
The record date is on the same day as the ___________?
ex-dividend date
35
What qualifies someone to be an establish (penny stock) customer?
1. Has held an account with the BD for at least one year (and has made a deposit of funds or securities) OR 2. Has made at least three penny stock purchases of different issuers on different days
36
What are the different ways dividends can paid to shareholders?
Cash dividend, stock dividends, product divdends
37
What must a BD do when their customer's account holds penny stocks?
Regardless of account (in)activity, provide a monthly account statement indicating the market value and number of shares for each penny stock held in the account and the issuer's name
38
What does [CMV x outstanding shares] represent?
A corporation's market cap
39
What are distributions of a company's profits to its shareholders?
Dividends
40
What are shares a corporation has issued and subsequently reacquired?
Treasury stock
41
What is statutory voting?
A voting system that allows a stockholder to cast one vote per share owned for each item on a ballot.
42
When are cash dividends typically disbursed?
Quarterly
43
What are the characteristics of treasury stock?
Treasury stock can be held indefinitely or can be reissued or retired. Treasury stock also does not carry certain rights, such as voting rights and the right to receive dividends
44
What are stock dividends?
Dividends issued in the form of additional shares of common stock
45
What does CMV stand for
Current Market value
46
What is outstanding stock?
All shares that a company has issued and that are in the hands of investors
47
What is a penny stock?
An unlisted (not listed on a U.S stock exchange) security trading at less than $5 per share.
48
What are the different classes of common stock for corporation?
Authorized, issued, outstanding, treasury
49
What is another term for bonds?
Debt
50
What does it mean for common stock to be 'freely transferable'?
It means shareholders have the right to sell or give away their shares without permission of the corporation
51
What is the difference between an established customer vs. a normal customer in a Penny Stock cold-calling?
Established customers are exempt from the suitability statement requirement
52
What is the date an agent sends dividend checks to all stockholders whose names appear on the books as owners as of the record date?
Payable date
53
What are Large-cap stocks?
Stocks of the largest companies, such as big, long established firms or rapidly growing technology companies
54
What are stocks of the largest companies known as?
Large-cap stocks
55
The ex-dividend date is on the same day as the ___________?
Record date
56
What are Blue-chip stocks?
Stocks of large-cap companies that have a long history of steady dividend payments
57
How are nonqualified cash dividends taxed?
At the investor's ordinary income tax rate
58
What preemptive right do common stockholders usually have?
The right to maintain their proportionate share of ownership in the corporation
59
What are small-cap stocks?
The smallest stocks that are still large enough to be listed on national exchanges. These stocks tend to be oriented toward growth and produce very little dividends
60
What is the voting system that allows a stockholder to cast one vote per share owned for each item on a ballot?
statutory voting
61
What is the alternative name to voting via absentee ballot?
Voting by proxy
62
Where do the shares for stock dividends come from?
Authorized shares or treasury stock
63
What is stock of companies that are not as big as large-cap stocks and are too big to be small-cap?
Mid-cap stocks
64
What value threshold must a security reach to be considered a penny stock?
Under 5$
65
What are the four dates associated with the dividend disbursement process?
Declaration date, Ex-dividend date, record date, payable date
66
What voting rights do common stockholders of a company have?
To vote for corporate leaders, and, if asked, can vote on issuing new shares or a major change in the corporations direction or identity
67
What does ownership of a share of stock entitle the shareholder to?
A portion of the company's earnings and a vote in major management decisions
68
What is the date a company's BOD approves a dividend payment?
The declaration date
69
What are the primary financial benefits of owning common stock?
Potential capital appreciation, income from dividends, hedge against inflation, limited liability
70
What is cumulative voting?
A voting system that allows stockholders to allocate their total votes in any manner they choose
71
What dividends are taxed at investor's income tax bracket up to the specified maximum?
Qualified Cash dividends
72
What information about a corporation do common stockholders have a right of access to?
1. Limited access to the Corporation's books 2. The right to examine the minutes of meetings of the BOD 3. The right to examine the list of stockholders (for a credible reason) 4. To receive an audited set of financial statements of the company's performance each year
73
What entity sets the ex-dividend date?
74
What are product dividends?
Dividends issued in the form of a sample of the company's product
75
What voting system benefits larger shareholders?
Statutory voting
76
What is a document that fully describes the risks associated penny stock investments ?
Penny stock disclosure document
77
What are the primary financial risks of owning common stock?
Value risk, decreased or no dividend income, low priority at dissolution
78
What type of dividends are issued in the form of additional shares?
Stock dividends
79
What is the voting system that allows stockholders to allocate their total votes in any manner they choose?
Cumulative voting
80
How is the maximum tax rate on qualified dividends determined?
By current IRS tax code and will depend on the investor's income tax bracket
81
What are the smallest stocks that are still large enough to be listed on national exchanges?
Small-cap stocks
82
Who does statutory voting benefit?
Larger shareholders
83
What is the date on which you must be a stockholder in order to receive a stock's dividends?
Record date
84
What must a BD disclose to a customer in a Penny stock cold-calling solicitation?
1. Name of the penny stock 2. The number of shares to be purchased 3. A current quotation 4. The amount of commission that the firm and the representative received
85
What is the alternative name to voting by proxy?
Voting by absentee ballot

Securities Industries Essentials (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions