FINRA SIE Dumps Questions Answers

Step by Step Explanation:

Secondary Offering: Involves the sale of shares by an existing shareholder, such as an insider, rather than the company itself issuing new shares.

Incorrect Options:

A: Rights offerings involve giving existing shareholders the opportunity to buy additional shares.

B: Private offerings are not registered with the SEC and involve limited investors.

C: An exempt offering refers to securities exempt from SEC registration, such as Regulation D offerings.

References:

SEC Guide on Secondary Offerings:SEC Secondary Offerings.

Nonqualified deferred compensation (NQDC) plans allow employees to defer income until a future date.

D is correctbecause NQDC funds remain part of the company’s general assets, which creditors may claim if the company goes bankrupt.

Ais incorrect as NQDC plans are not subject to ERISA rules.

Bis incorrect because these plans do not require IRS review.

Cis incorrect as NQDC assets are not required to be held in escrow.

Purchasing a put option allows the customer to sell the stock at a predetermined price (the strike price) if the share price declines. This strategy protects against downside risk while maintaining upside potential.

C is correctbecause a put acts as insurance, locking in a minimum sale price.

Ais incorrect because selling a put exposes the investor to additional risk if the stock declines.

Bis incorrect because selling a call generates income but does not protect against downside risk.

Dis incorrect because purchasing a call is a bullish strategy unrelated to protecting existing positions.