Exam (elaborations)
SIE EXAM QUESTIONS WITH VERIFIED SOLUTIONS
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SIE EXAM QUESTIONS WITH VERIFIED SOLUTIONS SIE EXAM QUESTIONS WITH VERIFIED SOLUTIONS
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SIE EXAM 2024-2025 QUESTIONS WITHVERIFIED SOLUTIONS
Do common stock holders have to right to inspect all books of a company? - CORRECT
ANSWER No, only certain items suchs as the income statement and balance sheet
Order of asset distribution - CORRECT ANSWER Taxes
Secured debt
Unsecured debt
Preferred stock holders
Common stock holders
What type of corporate security is considered the riskiest? - CORRECT ANSWER
Common stock
Of all securities, common stock has historically - CORRECT ANSWER Provided the
best hedge against inflation, best capital appreciation potential
Classifications of marginals securities - CORRECT ANSWER Registered securities,
OTC securities,
Regulation T - CORRECT ANSWER Regarding extension of credit to
customers...requires that payment for purchases of securities be received by the 4th
business day after the trade (T+4)
On what IRS form are gains and losses from securities reported on? - CORRECT
ANSWER 1099b
Who must approve stock splits - CORRECT ANSWER Common share holders must
vote to approve a stock split. The split must also be approved by the board
Warrants - CORRECT ANSWER Long-term option to buy stock. Typically issued with
an IPO to make investors more interested. Gives IPO investors the right to buy more
shares of the company at a set price for x number of years.
,SIE EXAM 2024-2025 QUESTIONS WITH
VERIFIED SOLUTIONS
Can be traded
Premium = s-x
Preemptive rights - CORRECT ANSWER Short-term Rights granted to existing
shareholders that entitle shareholders to purchase newly issued shares of a corporation's
stock, equal in percentage to shares already held, before the stock is offered to outside
buyers.
Rights can be sold and expire. Max maturity = 90 days
If rights are exercised, proportion of ownership remains the same.
Outstanding shares/new shares = # of rights to buy 1 share
DERP - CORRECT ANSWER Declaration
Ex-date
Record date
Payable date
Serial bonds - CORRECT ANSWER Series of bonds with one issue date and
varying/staggered maturities
Balloon maturity - CORRECT ANSWER A type of maturity schedule for an issue of
bonds that shows a relatively small number of bonds maturing serially (each year) and a
large number maturing in a later year
Current yiels - CORRECT ANSWER Annual coupon$/current mkt price$
, SIE EXAM 2024-2025 QUESTIONS WITH
VERIFIED SOLUTIONS
YTM > coupon - CORRECT ANSWER Bond trades at discount
YTM < coupon - CORRECT ANSWER Bond trades at a premium
YTM = Coupon - CORRECT ANSWER Bond trades at par
1 Point (bonds) - CORRECT ANSWER $10 - corporate bonds
Basis point - CORRECT ANSWER 1/100 of 1% or .01%
Duration - CORRECT ANSWER Measure of the sensitivity of a bond's market price to
changes in interest rates.
Ex. Duration of 5 = 5% price move for 1% interest rate move.
Trust Indenture Act of 1939 - CORRECT ANSWER Federal law requiring all corporate
bonds to be issued under an INDENTURE agreement approved by the SEC and providing
for the appointment of a qualified trustee free of conflict of interest with the issuer. The
Act provides that indentures contain protective clauses for bondholders.
Regular way settlement for T-notes, bills, and TIPs - CORRECT ANSWER T+1 in
secondary market
T+3 in primary auction market
Series EE savings bond - CORRECT ANSWER Non-marketable federal savings bonds.
Denominations of $25-$10,000. Insured, cannot be used as collateral for a loan.
Redeemable prior to maturity (after 1 year)
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