SIE Exam Practice - Questions and Answers An advertisement used by register investment companies that advise readers to obtain a full prospectus is
... [Show More] called ________ It is not permitted to include an application to invest, and it must contain specific caveats pursuant to SEC Rule 482 Omitting prospectus A note issued in which the government borrows money to finance a project and then repays lenders with revenue generated by the same project is called RAN (Revenue Anticipation Note) A type of public offering auction in which the price of the offering is set after taking in all bids to determine the highest price at which the total offering can be sold is called the Dutch Auction In addition to the federal securities laws, each state has its own set of securities laws, commonly referred to as ______, which are designed to protect investors against fraudulent sales practices and activities Blue Sky Laws What passes capital gains, dividends, and interest earned on fund investments directly to shareholders so that it is taxed only at the personal level, and double taxation is avoided? Regulated investment company In any single life private annuity transaction, if the seller outlives his or her actuarial life expectancy, the purchaser will have paid _______ for the property. If the seller does not outlive his or her actuarial life expectancy, the _________ will have made a good financial deal. too much; purchaser How is the net asset value (NAV) of a mutual fund calculated? NAV=(Total value of investment - liabilities) / shares outstanding The statement of cash flows is separated into what categories? cash flow from financing activities cash flow from investing activities cash flow from operating activities Common stock is referred to as _______ because the owner of the stock is also an owner of the corporation and may participate in its capital and income growth Equity What is considered a hybrid security? Preferred stock (it has both common stock and fixed-income investments) What occurs when the supply of goods and services exceeds their demand? Deflation An IRA must be created and funded by ________ of the calendar year following the year in which the contribution applies. April 15 What calculates the required amount of an employer's annual contribution to a defined benefit plan to ensure that current and future plan benefits are available to the participants? Actuary The Bank Secrecy Act of 1970 requires financial institutions to assist US government agencies in detecting and preventing money laundering by filing reports of cash transactions exceeding what daily amount? $10,000 A fixed income security is subject to what risks? Exchange rate risk purchasing power risk default risk liquidity risk reinvestment risk Diversification smooths price volatility, historical above-inflation return, can preserve purchasing power in a portfolio Mutual Fund Liquid, easily converted to cash, low default risk, low real return Money market fund Fixed return, may lose value if not held until maturity, fixed interest payments corporate bond Not liquid, generally adequate inflation hedge Real estate Used to generate income and growth, marketable, historical above-inflation return, can preserve purchasing power in a portfolio common stock Rob owns 200 shares of Epsilon stock, which recently announced that it will pay a 4% stock dividend. How many shares will [Show Less]