Exam 1: Investment and Bond Market

Newbie is a registered representative with Savvy Investments and has recently gotten married.(Her new name is Mrs. Newbie-Oldman.)Her husband has been a client of hers, and the couple now wants to put her name on the account. In this case:

The fees that member firms must pay to FINRA are based on: I. the total market value of its assets. II. the number of registered representatives it employs. III. the number of branch offices it has.

Which of the following is true about a hedge fund?

Your cousin has recently attended a seminar on the benefits of diversification. Based on what he learned, he decided to sell the shares he had in a large stock growth fund and put 50% of his money in hotel stocks and 50% in airline stocks. Based on this information, you can tell him:

Which of the following are fiscal policy tools under the jurisdiction of the U.S. Congress?

Which of the following is not one of the purposes of FINRA as stated in its articles of incorporation?

B. Beard started making regular investments in a mutual fund with the goal of financing a five-year circumnavigation on his 40-foot sailboat, "Pirate's Lady." He is getting ready to depart and wants to set up an automatic withdrawal plan such that the money he has invested will see him through his circumnavigation, with nothing remaining in the account at the end. Which of the systematic withdrawal plans will best fit his needs?

A discretionary account authorization permits a registered representative to decide:

A bond has a face value of $1,000, matures in 12 years, and pays an 4% coupon, with interest paid semiannually. If the bond is priced to yield 3.5%, it is selling:

Under FINRA rules, the variable contract sales agreement must specify that any sales commission is to be returned to the insurance company if the buyer terminates the contract within:

Jack purchased a new bond of the Candlestick Corporation for its face value of $1,000.The bond has a coupon rate of 3.5%, makes semiannual interest payments, and matures in fifteen years. A year after purchasing the bond, Jack needs to sell the bond to offset some major expenses he incurred when his home caught on fire. Interest rates in the economy at this time have fallen to 3.0%.Given this scenario, when Jack sells the bond, he can expect to receive which of the following?

Commercial paper is:

Which of the following would be required to register as an investment company? I. a non-diversified management company II. a unit investment trust III. a face-amount certificate company

Which of the following statements about mutual funds is false?

MBIA, Inc., a municipal bond insuring company, has a bond issue that is selling for $80.05 per $100 of par. The bond has a coupon rate of 7%, with semiannual payments, and matures in 2025. The current yield on this bond is:

Newbie, a newly-minted registered representative with Savvy Investments, just had her first client walk through the door. Before she can do anything, Ms. Newbie must obtain which of the following pieces of information from her client?

Which of the following statements about non-qualified employer-sponsored retirement plans is false?

Jake's Uncle Zeke gave Jake and his new bride 100 shares of the stock of Southwest Airlines (LUV) when they got married. Uncle Zeke had paid $16.60 for the stock several years earlier, but it was selling for only $12.10 on the day of the wedding. Jake and his bride are unimpressed with the stock's performance a few months later and decide to sell it for $11.00, its market price at that point. What are the tax consequences of the sale for the newly wedded couple?

Paul is 36 years old and is married with two children, ages eight and ten. Paul lays carpet for a living, working as an independent contractor, and earns about $35,000 a year. His wife, Paula, is 33 years old, drives a school bus and earns only $18,000 a year, but her job provides the family with low-cost health insurance. They live conservatively and barely make ends meet. Paula recently inherited $180,000, however, and the couple would like to invest it, with the goal that they can both retire when Paul turns 62.The inheritance also included an educational endowment for their children, so they will not have to worry about saving for their children's college educations. Which of the following would not be a suitable recommendation for the allocation of their investment monies?

Which of the following actions will result in a taxable event for Tex Payor, an investor in the Invest4U Mutual Fund? I. Tex sells some of his shares of the fund at a profit. II. Tex exchanges some of his shares in Invest4U for shares of another fund in the same family of funds. III. Tex opts to reinvest any dividend or capital gain income he might have received in the fund to buy additional shares of the fund in lieu of receiving a check from the fund.