Debt Securities
Which U.S. Government Security is traded on a discount yield basis?
T- Bill
This custodial account tax consequence is sometimes called a
kiddie tax
What is the Underwriting Timeline (3 Phases)
Pre- Registration Period (Quiet Period)
Waiting Period (Cooling- Off Period)
Post- Effective Date
What type of stock is most often associated with growth?
Common Stock
In the event a put contract expires, what is the writer’s maximum gain?
The total premium
All specific information concerning the conversion terms of a convertible bond are to be found in the
Bond Indenture
The naming of a trusted contact is requested at account opening for all account types EXCEPT:
An account of an institutional customer
In preparation for a corporate securities offering this entity organizes a group of investment banks to assist in the distribution of a stock
Lead Underwriter
The risk that a bondholder may lose money due to the insolvency of the issuing corporation is called
Credit Risk
An investor is long 1 RFT May 35 put @ 3. What is the investor’s maximum loss?
$300
When the bond is in default
How does a corporation indicate who is authorized to trade for a corporate brokerage account?
Through a resolution of the board of directors
Which fee takes the smallest amount of the spread?
Manager's Fee (10%-20%)
Who should NOT invest in municipal bonds or municipal bond funds?
Investors in low tax brackets/are not subject to AMT
When the writer of a put option receives an assignment notice, she must
purchase the underlying security at the strike price.
An Investor holds an ABC Corp bond, coupon 4%, purchased at 95. The current yield is
4.2%
Current yield is found by dividing return by investment. In this case, the annual coupon is 4% ($40), and the investment is 95 ($950).
Explain the difference between Full, Limited, and Durable Power of Attorney.
Full: Allows the third party to do anything that the account owner can do.
Limited: Does not permit deposit or disbursement of funds or securities to and from the account.
Durable: Lasts through incapacitation or in the event a client is unable to act for themselves
Final settlement of the syndicate account in a corporate underwriting must take place within__ days of the issuer's delivery of the securities to the syndicate manager.
90
A portfolio of bonds and stock (60/40+ bonds); Treasuries and high-grade corporates; some blue-chip stock would fall under which risk tolerance category?
Moderately Conservative
When tendering an options exercise notice to a clearing member, the OCC uses which process?
A random selection process
Rank Moody's bond ratings from strongest to weakest credit worthiness.
Aaa
Aa
A
Baa
Ba
B
Caa
Ca
C
Funds in retirement accounts are usually distributed through a legal document known as a (think divorce)
Qualified Domestic Relations Order (QRDO)
What is the Standard Order Priority
Presale
Group net
Net Designated
Member orders at the takedown
Pro Golfers Don't Miss
Which CMO Tranche typically has the lowest yield?
Planned Amortization Class (PAC)
Identify : Buy 1 Oct 50 call, Sell 2 Oct 60 calls, and Buy 1 Oct 70 call
Butterfly Spread: four options, all with the same expiration, and three of which have different strike prices.