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Questions and Answers
The two classifications of chapters for corporate bankruptcies are?
The two classifications of chapters for corporate bankruptcies are?
Rules to protect the investing public during the public offering process include all of the following EXCEPT?
Rules to protect the investing public during the public offering process include all of the following EXCEPT?
An oil and gas DPP that invests in wells that are already producing is known as?
An oil and gas DPP that invests in wells that are already producing is known as?
Which is the most common way investors pay a mutual fund's sales charge?
Which is the most common way investors pay a mutual fund's sales charge?
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Each of the following is considered a control person under SEC Rule 144 EXCEPT?
Each of the following is considered a control person under SEC Rule 144 EXCEPT?
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Limited partnerships?
Limited partnerships?
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The owner of a listed put equity option has the right to?
The owner of a listed put equity option has the right to?
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Which of the following are considered systematic risks—those that would impact all businesses?
Which of the following are considered systematic risks—those that would impact all businesses?
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Study Notes
Corporate Bankruptcies
- Two classifications: liquidations and reorganizations.
- Liquidation involves selling assets; proceeds are distributed based on claim priority.
- Reorganization allows companies to continue operating while repaying creditors.
Public Offering Protections
- Securities industry cannot limit shares purchased by issuer’s employees.
- Insiders must not exploit their position for personal benefit on new issues.
- Securities must be offered at the public offering price.
- Member firms cannot withhold securities in offerings for their own advantage.
Oil and Gas DPPs
- An income program invests in currently producing wells.
- Exploratory programs focus on drilling for new oil and gas reserves.
Mutual Fund Sales Charges
- The most common sales charge is a front-end load, paid at purchase.
- Class A shares (front-end load) have lower ongoing expenses than other share classes.
Control Persons Under SEC Rule 144
- Control persons include directors, officers, and those owning 10% or more of equity securities.
- Individuals owning 5% or more of common stock are not considered control persons.
Limited Partnerships
- Limited partnerships can end on a predetermined date or be dissolved early by vote.
- Unlike corporations, which exist in perpetuity, limited partnerships have a specified lifespan.
Options and Rights
- Owners of listed put equity options have the right to sell stock at the strike price.
- Exercising a put instructs the option writer to buy the stock at the agreed strike price.
Systematic Risks
- Systematic risks affect all businesses and include market risk and inflation risk.
- Regulatory risk and business risk are nonsystematic, affecting specific companies or sectors.
Hedge Funds
- Associated activities include commodity speculation and high-leverage investments.
- Further details on hedge fund characteristics were cut off; context may include strategies and investor types.
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Description
Test your knowledge on corporate bankruptcies with this quiz from Unit 2 of the Securities Industry Essentials (SIE) Exam. Focus on understanding liquidations and reorganizations to succeed in the financial sector.
