SIE Exam Prep Unit 2 (Kaplan Financial)

American Depository Reciepts

Facilitates trading in foreign securities in the U.S. domestic markets.

Rule 144

An SEC rule that sets the requirements for selling or purchasing restricted, unregistered, or control securities.

Private Placement

An offering of new securities under Regulation D that is not available to the public as a whole, but to select investors.

Preemptive Rights

Allows the investor to maintain their proportionate ownership by buying shares of the new issue.

Rights

Short term, given to existing shareholders, allows one to purchase shares below market vaue.

Warrants

Long term, bundled with other securities, allows someone to purchase shares at a price that is above market value when the warrant was issued.

Stock Dividends

This happens when a company

Forward Stock Split

Share price decreases, while number of shares increases.

Merger

Combining two or more companies by offering the stockholders of one company cash or securities in another company in exchange for the surrender of their stock.

Acquisition

The process of one company purchasing all or most of another company’s shares or assets to gain control of that company.