Options
The breakeven point for the holder of a call is
the strike price plus premium paid
The signature of the customer
Conversion Ratio =
Par Value of Bond/Conversion Price
Monetarist Theory states that the economy is stimulated by
The actions of the Federal Reserve
What act created the Securities and Exchange Commission?
The Securities Exchange Act of 1934
Definition of Hedging?
Protecting an existing core long or short position
What is Regulation S-P?
Rule that limits the ability of broker-dealers, investment companies/advisers to disclose material nonpublic info [MNPI] about their customers with nonaffiliated third parties.
Which bond is not subject to reinvestment risk?
Zero-Coupon Bonds
A registered representative has a dispute with his firm. Under FINRA rules, this will be settled by:
Arbitration
The Securities Exchange Act of 1934 regulates what?
It regulates securities transactions on the secondary market.
1. Contract Buyer = Contract ___ = ___ the Contract
2. Contract Seller = Contract ___ = ___ the Contract
1. Holder;Long
2. Writer;Short
What information is required for the USA PATRIOT Act?
-Customer's name
-Address
-DOB
-Social Security number or tax identification number
Bonds that mature at specified intervals over a predetermined time period are known as?
Serial Bonds
In a controlling party securities transaction, a FINRA member must-
Notify the customer of control relationship in writing at or before completion of transaction
Under Rule 10b-5-1, pre-arranged trading plans by insiders are permitted only if
the provisions cannot be altered during the plan's life.
What is the strike price?
The fixed price of the security specified in the contract at which the holder can either "call away" the security or "put" the security; aka Exercise Price
What is the purpose of the Know Your Customer rule?
The KYC rule is to use reasonable diligence to collect/maintain essential information on their customers.
If done before 2:30 pm ET, cash settlements occur _____.
on the same day as the trade date.
In order to remove money from the economy, what does the Fed do with Treasury Bonds?
The Fed sells Treasury Bonds
What does SIPC do?
It protects customer accounts at broker-dealers that are now defunct
A customer has the following position:
Short ABCD Jul 25 put @ 3
Is it
Bullish,
Bearish,
In the money,
OR
out of the money?
It is bullish
How often must a principal review discretionary accounts?
1. Daily
2. Monthly
3. Quarterly
4. Frequently
4. Frequently
What are Capital Appreciation Bonds?
CABs are muni zero-coupon bonds that are usually sold at a deep discount to par.
What are 2 important functions of the IRS?
Collects taxes AND enforces tax law
A blue sky law is meant to do what?
Protect a state's investors against securities fraud.