Series 7 Stack Word Scramble
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Q Intro Securities Industry | Answer |
Capital Market | Free flow of capital between corps, gvt bodies & investors |
business raise money to build & expand by | selling stocks and bonds |
what is stock | investors purchase equity ownership in issuer's business |
how do bonds wprk? | investors lend money in exchange for debt = bond |
what are securities? | stocks & bonds |
who could be the issuers of bonds? | businesses/govts (fed/state/local) |
what happens with capital raised in govt bonds? | govet raises money to provide service to public. |
what are the types of capital markets? | primary & secondary |
what is primary capital market? | sale of securities to investors directly. |
example of primary capital market | IPO |
what is an IPO | corporations' 1st attempt to attract capital from financial institutions & general public |
is t-bill primary of secondar capital market? | primary |
what is a t-bill? | Short-tm US govt debt w mty <1 year. High credit rating |
what is secondary capital mkt? | Trading of fin instrumts btn investors |
example of secondary capital mkt | NYSE |
does sec capital mkt have direct effect on issuer? | no |
how does secondary capital mkt affect issuer? | willingness of investors to invest increases likelihood of corps to raise cap in future |
what might have caused the great depression? | unlmtd opportunities, investors invested, borrowed, stock mkt grew. Mkts were unltd |
when did the bubble burst? | 1929 |
when did fed govt intervene? pres? | 1932, franklin roosevelt |
what act resulted after great depression? | securities act of 1933 |
When was Securities Act? | 1933 |
What does Securities Act do? | Full & Fair Disclosure |
Securities Act is in what market? | Primary |
Securities Act Provides what to investors? | Info needed to make informed investmt decidions |
Securities Act Provides what to issuer/IB? | rules to conduct on sales & mktg of securities |
When was Securities Exchange Act? | 1934 |
What does Securities Exchange Act do? | Est. SEC & regulate domestic secs in prim & sec mkts + extnd credit in secs industry to Fed Res Board |
What is SEC fn? | Regulate domestic secs dealings in both primary & sec mkts. + regulatory overst re:extnsn of credit in secs industry |
SRO | self regulatory org. ex: NYSE |
What is Maloney Act? | Enables creation of non-exchange SROs |
What yr is Maloney Act? | 1938 |
Which Act enabled MSRB? | Maloney Act |
MSRB | Municipal Securities Rulemaking Board |
MSRB year | 1975 |
NASD | National Association of Securities Dealers |
NASD year | 1939 |
NASD function | Self regulatory organization for OTC |
What did Trust Indenture Act do? | Security for bond investors by requiring agmt between issuer and trustee if corporatn liquidates |
Trust Indenture Act year | 1939 |
What is indenture? | Agreement between issuer and trustee of bonds |
What is Trustee? | Acts for the owner of bonds |
Investment Company Act year | 1940 |
What does Investment Company Act do? | Mandates mutual funds to register with SEC as Investment Investment Company |
Why do mutual funds need to register with SEC? | Mutual Funds are companies formed to pool investors' money & invest that in securities |
Investment Advisors Act year? | 1940 |
What does Investment Advisors Act do? | Mandates firm managing assets of mutual funds as Investment Advisor |
Could lawyer, accountant, teacher, engineer, publishers be Investment Advisors? | No, unless they charge separate fee for investment advise |
Examples of Investment Advisors | Portfolio Manager of mutual funds |
Securities Investor Protection Act - SIPC year | 1970 |
What does SIPC do? | It is an insurance that covers customers of brokerage firms if they're insolvent |
What is ERISA? | Employee Retirement Income Securities Act |
ERISA year | 1974 |
What does ERISA do? | Establish standards for funding, vesting etc of private retirement accounts & fiduciary responsibilities of trustees |
ERISA example | 401(k) |
Securities Acts Amendments year | 1975 |
What does Securities Acts Amendments do? | Created MSRB |
What is MSRB? | It is SRO for firms doing transactions in muni securities. |
Does MSRB have an enforcement arm? | No |
How is muni transaction rules enforced? | By other regulatory entities |
What is Insider Trading Act? | Penalizes insider trading |
Insider Trading Act year | 1988 in response to 1980 scandals |
Did Acts of 33 & 34 prohibit insider trading? | Yes |
Did Acts of 33 & 34 penalize insider trading? | No |
What is the penalty of Insider Trading in '88 Act? | Penalties up to $1MM &/or 10 yrs prison |
Federal Telephone Consumer Protection Act year | 1991 |
What does Federal Telephone Consumer Protection Act do? | Cold Callers must have do not call list |
Penny Stock Rule year | 1991 |
What does Penny Stock Rule do? | Requires trading firm of penny stocks to sign disclosure with potential buyers as they're risky |
What are Penny Stocks? | securities trading less than $5 per share - risky |
Created by:
aymanm8
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