The Securities Investor Protection Corporation Insures the Cash and Securities

question 7

Multiple Choice

The Securities Investor Protection Corporation insures the cash and securities held by the brokerage company from theft or loss of the security.Each investor is covered to a maximum of ____.

• A) $100,000
• B) $200,000
• C) $500,000
• D) $1,000,000

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Definitions:

Financial Markets

Marketplaces where individuals and institutions can trade financial securities, commodities, and other fungible items of value at low transaction costs.

Marginal Investor

A marginal investor is a representative investor whose actions reflect the overall market sentiment and whose transactions can affect a security's price.

Common Share

Equity ownership in a company, providing voting rights and entitling the shareholder to a share of the company's success through dividends and/or capital appreciation.

Dual-Class Shares

Sometimes created by a firm to meet special needs and circumstances. Generally, when special classifications of stock are used, one type is designated “Class A,” another as “Class B,” and so on. For example, Class A might be entitled to receive dividends before dividends can be paid on Class B stock. Class B might have the exclusive right to vote.