Keentune

Securities Markets curriculum

8 chapters
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164 concepts
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free
Everything the adaptive question bank can teach and test in Securities Markets, from foundations through advanced practice. Work through it in order, or start practising and let the questions find your level.
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A. Regulators & industry structure
The SEC as a government agency; created by the '34 Act; what it regulates.
FINRA as a self-regulatory organization: membership, fines/suspensions/bars, no jail power.
MSRB (writes muni rules but doesn't enforce) and CBOE as SROs.
SIPC covers custody failure of a broker-dealer, never market loss; coverage limits.
Bank deposits (FDIC) vs brokerage custody (SIPC) the classic confusion.
The Fed's securities-relevant roles: Reg T margin authority, monetary policy.
State regulators and NASAA; blue-sky laws (bridge to Series 63/65/66).
Agency vs principal capacity; "broker-dealer" as a firm acting in both.
Investment adviser vs broker-dealer: compensation model and standard of care.
Transfer agent, custodian, clearing corporation (DTCC/NSCC), prime broker.
Why SROs exist alongside the SEC: industry expertise, industry funding, SEC oversight as the backstop.
How an SRO rule takes effect: filing with the SEC, public comment, approval an SRO cannot legislate alone.
Federal covered securities under NSMIA and the narrow authority states keep (notice filing, fees, antifraud).
Becoming and staying a member firm: the new-member application and the continuing-membership review for material changes.
Introducing (fully disclosed) firms vs clearing/carrying firms; what the carrying agreement moves and what it does not.
Book-entry custody at DTC vs multilateral trade netting at NSCC why one net obligation replaces many trades.
How a SIPC liquidation actually runs: trustee, the "customer" definition, claim priority, and what is not a claim.
Futures oversight (CFTC and the NFA) vs securities oversight (SEC and FINRA) which product falls under which regime.
Treasury and FinCEN's role in securities: the Bank Secrecy Act recordkeeping and reporting layer.
Public disclosure tools: BrokerCheck for firms and reps, IAPD for advisers what a customer can actually look up.
What a listing standard tests (float, price, governance) and what a delisting signals.
Retail investors, institutions, pension funds, endowments, hedge funds and sovereign funds who supplies size and why it matters.
B. Primary market
Who receives the proceeds the foundational issuer-vs-investor distinction.
IPO vs follow-on vs secondary offering; issuer proceeds vs selling shareholders.
Firm commitment vs best efforts (all-or-none, mini-max).
Lead underwriter, selling group, and the components of the spread.
What the '33 Act requires; the registration statement and red-herring prospectus.
SEC registration is not endorsement the classic disclaimer trap.
Rule 415 shelf registration basics.
Filing the registration statement, SEC staff comment letters, amendments, and what "effective" means.
The waiting period between filing and effectiveness: indications of interest only, no sales, no confirmations.
What the red herring must carry and the two things it omits (final price and proceeds).
The underwriters' due-diligence session and the '33 Act liability it is meant to defend against.
The narrow set of facts a tombstone may state, and why it is not itself an offer.
Aftermarket prospectus-delivery obligations and how they differ for a listed vs unlisted issuer.
Manager's fee, underwriting fee, and selling concession who earns which slice (computed family).
Eastern (undivided) vs Western (divided) syndicate liability for unsold bonds (computed).
The overallotment option: what it lets the syndicate do when an issue is oversubscribed.
The one permitted form of price support: a stabilizing bid at or below the public offering price.
Indications of interest, book building, and how a hot issue actually gets allocated.
Coordination, qualification, and notice filing three ways an offering clears a state.
Post-IPO lock-up agreements and research quiet periods; what each restricts and for whom.
Subscription rights to existing holders, the standby underwriter, and dilution to non-subscribers.
Routes to public trading that are not a traditional underwritten IPO, and how proceeds differ.
C. Exempt offerings & securities
Reg D private placements and the accredited-investor definition.
Treasuries/munis (exempt securities) vs Reg D/144 (exempt transactions).
Restricted and control stock: holding periods and volume limits in concept.
Government, municipal, bank, insurance-company and nonprofit issues the reason each sits outside registration.
General solicitation is permitted only under 506(c), and only with verified accredited investors.
The routes to accredited status: income, net worth excluding a primary residence, entity size, professional credentials (mechanics only).
What the Form D notice filing is and what it is not (no SEC review, no approval).
The PPM's role where no statutory prospectus is required, and what it discloses.
How an investor is admitted to a private offering and the representations they sign.
Regulation A Tier 1 vs Tier 2: offering ceiling concept, state review, and ongoing reporting.
Crowdfunding through a registered funding portal; investor participation limits in concept.
Purely intrastate offerings and the resale restriction that keeps the securities local.
Offshore offerings to non-US persons and the distribution-compliance period that follows.
Resales of restricted securities to qualified institutional buyers and the market that creates.
Where each comes from: an unregistered purchase vs the holder's affiliate status.
The notice an affiliate files before selling, and the small-sale case where it is unnecessary.
Restrictive legends, the transfer agent's role, and the opinion letter that clears them.
Why exempt offerings are illiquid: no registered market, resale limits, and opaque valuation.
D. Secondary market structure
Auction (exchange) vs negotiated (OTC) markets; listing standards in concept.
Quoting a two-sided market: bid vs ask and the spread.
First/second/third/fourth markets; dark-pool basics.
Where a retail order goes; the best-execution obligation.
Dow vs S&P 500 vs Nasdaq Composite what each measures.
Bull vs bear markets; long vs short as market views.
Regular-way T+1, cash settlement, and the ex-date consequence.
Market-wide vs single-stock trading halts and circuit breakers.
The order-protection rule: an inferior price may not trade through a better protected quotation.
The national best bid and offer, and what Level I, II and III quote access each shows.
Affirmative and negative obligations of a designated market maker on a listed security.
Electronic communication networks and alternative trading systems as execution venues.
Quotation tiers for unlisted stock, and why being quoted is not the same as being listed.
Post-trade transaction reporting for corporate bonds, and the opacity problem it solved.
Consolidated last-sale and quotation feeds; market data as a product with a price.
How one opening or closing price is derived from an order imbalance.
Pre- and post-market sessions: thin liquidity, wider spreads, and news risk.
Where borrowed shares come from, who is paid, and what a recall does to a short.
Tender-offer mechanics: premium, pro-rata acceptance, withdrawal rights, and the minimum period concept.
Mergers, spin-offs and reverse splits, and how open orders and positions are adjusted.
DRIPs and direct-purchase plans as a distribution channel that bypasses the market.
What happens when delivery fails: close-out obligations, buy-ins, and who absorbs the cost.
How institutional size is worked: blocks, upstairs negotiation, and market impact.
Foreign listings, ordinary shares vs depositary receipts, and time-zone/settlement mismatches.
E. Economic factors
Expansion, peak, contraction, trough; what defines a recession.
Leading vs lagging vs coincident indicators which is which.
What GDP, CPI, and unemployment each measure; inflation vs deflation.
Who does what: the Fed vs Congress a top-3 SIE trap.
Open-market operations, discount rate, reserve requirements, fed funds rate.
Easy vs tight money and the transmission to bond prices and yields.
Normal, flat, and inverted curves and what each signals.
Strong vs weak dollar: who benefits; exchange-rate risk.
Board of Governors, the twelve reserve banks, and the FOMC which body controls which tool.
Fed funds, discount rate, prime, and secured overnight benchmarks which are set and which are market-determined.
M1 vs M2: what counts as money at each level and why the definition matters.
How reserves become deposits; the money multiplier as an intuition, not a promise.
Expectations, liquidity-preference, and market-segmentation explanations for the curve's shape.
Nominal return minus inflation; why a positive nominal return can still be a real loss (computed).
CPI vs PPI vs core measures, and what each deliberately leaves out.
Naming the regime from the growth-and-prices combination.
Frictional, structural, cyclical and seasonal unemployment and which policy touches which.
Keynesian demand management, monetarism, and supply-side theory the three labels exams test.
Taxation and government spending; deficits, surpluses, and the debt they accumulate.
Cyclical, defensive, and interest-sensitive industries as a descriptive classification.
Current account vs capital account, and how a trade deficit connects to capital inflows.
Floating vs pegged currencies; how interest-rate differentials move a currency.
Energy and raw-material prices as an economic input: pass-through to consumer prices and margins.
Capital mobility, globalization, and country/political risk expressed in economic terms.
F. Municipal market structure
States, counties, cities, districts and authorities; what municipal debt actually funds.
Awarding an issue by sealed bid vs negotiating with a chosen underwriter, and when each is used.
What a notice of sale tells prospective syndicates, and what it asks them to bid on.
The municipal disclosure document: preliminary vs final, and why it is not an SEC-reviewed prospectus.
The legal opinion on validity and tax exemption; qualified vs unqualified opinions.
The municipal advisor's duty to the issuer, and why that duty conflicts with underwriting the same deal.
Presale, group net, designated, and member orders the standard priority ladder and who benefits.
How the municipal spread splits into management fee, takedown, and concession (computed family).
Net interest cost vs true interest cost as award criteria, and why they can pick different winners (computed).
EMMA as the public repository; annual financial filings and material-event notices.
The administrative (A), definitional (D) and fair-practice (G) rule series, and who enforces them.
Municipal securities dealers, bank dealers, and broker's brokers who serves whom.
A dealer-quote market: bid-wanteds, offering lists, and structurally thin liquidity.
The Bond Buyer indices and the 30-day visible supply as gauges of the municipal market.
Current vs advance refunding; what makes a bond escrowed to maturity or pre-refunded.
Bond insurance, letters of credit, and moral-obligation backing as external credit enhancement.
529 plans and local government investment pools as municipal fund securities.
Why an issuer would forgo the federal exemption, and who buys the taxable bond that results.
G. Analytical & quantitative methods
Balance sheet, income statement, and cash-flow statement the question each one answers.
Assets = liabilities + shareholders' equity, and where a given transaction lands.
Current assets minus current liabilities, and the events that shrink it (computed).
Current ratio and quick ratio: what excluding inventory is testing for (computed family).
Debt-to-equity and bond ratio; what leverage does to earnings in both directions.
Operating margin, net margin, and return on equity (computed).
Basic vs fully diluted earnings per share, and what dilutes (computed).
Operating, investing, and financing sections; why profitable companies run out of cash.
P/E, price-to-book, dividend yield and payout ratio (computed).
Net tangible assets available to each common share (computed).
Present value, future value, discounting, and the rule of 72 (computed).
Total return including income, and annualizing a partial-year result (computed).
Why the compounded (geometric) average is never higher than the simple average (computed).
Dispersion as the raw risk measure; what one standard deviation actually describes.
Beta as sensitivity to the market; alpha as the return beta does not explain.
Correlation from −1 to +1 and its direct consequence for diversification.
Risk-free rate plus beta times the market risk premium (computed).
Return per unit of risk, and why two raw returns are not comparable without it.
Discounting coupons and principal the arithmetic behind price/yield inversion (computed).
Discounting a future funding goal for inflation (computed mechanics).
H. Portfolio theory & market strategies
What asset allocation means and how it differs from picking individual securities.
A long-run policy mix vs deliberate short-run deviations from it.
The efficient frontier: the most expected return available at a given level of risk.
Why correlation, not the sheer number of holdings, is what reduces portfolio risk.
Weak, semi-strong, and strong forms what each claims is already in the price.
Indexing vs active management; tracking error and the cost hurdle.
Valuing a company from its statements, industry position, and the economy around it.
Price and volume patterns: support, resistance, trendlines, and moving averages.
Growth, value and blend; capitalization tiers; how an index weights its members.
Fixed-dollar investing, and why average cost lands below average price (computed).
What rebalancing does to a drifted allocation, and the costs it incurs.
Matching a benchmark to a mandate; how the wrong index flatters or maligns a result.
Which measure isolates the manager and which reflects the investor's cash-flow timing.
Three maturity structures and the reinvestment profile each produces.
The same instrument used to reduce exposure or to create it intent, not product.
What an IPS records: objectives, constraints, time horizon, and review cadence.
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