Question 1

What does the following mean when printed on the stock exchange ticker tape?

Accepted Answer

A) one hundred shares of MST traded on the exchange and appear out of order on the tape 
B) trading was suspended on MST pending dissemination of news 
C) the last sale of MST was for 100 shares at 98.25 
D) the preceding transaction in MST was tow or more points different than 98.25 
A) one hundred shares of MST traded on the exchange and appear out of order on the tape 
B) trading was suspended on MST pending dissemination of news 
C) the last sale of MST was for 100 shares at 98.25 
D) the preceding transaction in MST was tow or more points different than 98.25 A

Question 2

What is the name for the rate of discount from the list price that is paid to a municipal securities underwriting group member for its sales participation?

Accepted Answer

A) commission 
B) concession 
C) spread 
D) takedown 
A) commission 
B) concession 
C) spread 
D) takedown D

Question 3

The Bubba Corporation has 50,000 outstanding shares and holds 20,000 shares as treasury stock. At the end of the third quarter $450,000 is distributed as a dividend on the common. How much is the dividend per share?

Accepted Answer

A) $22.5 
B) $9 
C) $6.43 
D) None of the above 
A) $22.5 
B) $9 
C) $6.43 
D) None of the above B

Question 4

The term "mutual fund" is popularly used for which of the following?

Accepted Answer

A) all investment companies 
B) pension funds 
C) open-end investment companies 
D) closed-end investment companies 
A) all investment companies 
B) pension funds 
C) open-end investment companies 
D) closed-end investment companies

Question 5

Big Easy Investment Banking, Inc., is participating in an Eastern account underwriting of $10 million of municipal bonds by agreeing to underwrite 10% of the issue. One week later, $4 million remains unsold but Big Easy has distributed $1.5 million of bonds. What is the liability of Big Easy remaining in the account?

Accepted Answer

A) $0 
B) $400,000 
C) $600,000 
D) $1,000,000 
A) $0 
B) $400,000 
C) $600,000 
D) $1,000,000

Question 6

The gross spread in a new issue depends upon which of the following?

Accepted Answer

A) the amount of the issue 
B) the type of industry in which the issuer is engaged 
C) the past record of the issuing corporation 
D) all of the above 
A) the amount of the issue 
B) the type of industry in which the issuer is engaged 
C) the past record of the issuing corporation 
D) all of the above

Question 7

Bubba is age 54 and has investments in a retirement plan with his former employer valued at $104,500. Bubba withdraws $25,000 to open a retail clothing store. Which of the following statements is true regarding Bubba's tax consequences?

Accepted Answer

A) the entire account is terminated and $104,500 is immediately taxable 
B) a penalty of 10% of the withdrawn amount is assessed 
C) a penalty of 10% on all assets in Bubba's account is assessed 
D) only regular income tax is due on the amount withdrawn 
A) the entire account is terminated and $104,500 is immediately taxable 
B) a penalty of 10% of the withdrawn amount is assessed 
C) a penalty of 10% on all assets in Bubba's account is assessed 
D) only regular income tax is due on the amount withdrawn

Question 8

Which of the following is not an intangible drilling cost?

Accepted Answer

A) salaries 
B) supplies and fuel 
C) machinery and pipe 
D) repairs 
A) salaries 
B) supplies and fuel 
C) machinery and pipe 
D) repairs

Question 9

Bubba is a registered representative who wishes to buy shares of a new issue his firm is distributing. Under FINRA Conduct Rules, Bubba may:

Accepted Answer

A) not do so under any circumstance 
B) do so if he has a history of buying hot issues 
C) not do so for his own account, buy may purchase shares for his sister's account 
D) do so if his allotment is insubstantial and not disproportionate to public orders 
A) not do so under any circumstance 
B) do so if he has a history of buying hot issues 
C) not do so for his own account, buy may purchase shares for his sister's account 
D) do so if his allotment is insubstantial and not disproportionate to public orders

Question 10

Which of the following option positions is indicative of the same class of option?

Accepted Answer

A) long one XYZ July 70 put and one XYZ July 70 call 
B) long one XYZ October 20 call and one XYZ January 30 call 
C) short one XYZ February 60 put and one ABC February 60 put 
D) short one XYZ June 40 call and one ABC June 20 call 
A) long one XYZ July 70 put and one XYZ July 70 call 
B) long one XYZ October 20 call and one XYZ January 30 call 
C) short one XYZ February 60 put and one ABC February 60 put 
D) short one XYZ June 40 call and one ABC June 20 call

Question 11

Bubba wishes to invest $50,000 in three mutual funds offered by different underwriters with growth as the main objective. A recommendation to purchase only one such fund for $50,000 might be more suitable to Bubba if:

Accepted Answer

A) the growth in one fund will be greater than the combined growth in three 
B) the income from one fund will be greater than the combined income in three 
C) a withdrawal plan would be easier to employ using a single fund 
D) the purchase of one fund would probably be made at a break point allowing more dollars to be invested in fund shares 
A) the growth in one fund will be greater than the combined growth in three 
B) the income from one fund will be greater than the combined income in three 
C) a withdrawal plan would be easier to employ using a single fund 
D) the purchase of one fund would probably be made at a break point allowing more dollars to be invested in fund shares

Question 12

Bubba has not existing positions in his account and writes 1 XYZ July 60 put and 1 XYZ July 60 call. What is this position called?

Accepted Answer

A) short combination 
B) long combination 
C) long straddle 
D) short straddle 
A) short combination 
B) long combination 
C) long straddle 
D) short straddle

Question 13

In the offering of new securities, members of the syndicate are permitted to sell to other dealers less the reallowance. The amount of the reallowance is determined by:

Accepted Answer

A) the FINRA 
B) the issuing corporation 
C) the syndicate manager 
D) the SEC 
A) the FINRA 
B) the issuing corporation 
C) the syndicate manager 
D) the SEC

Question 14

The Securities Act of 1933 provides for:

Accepted Answer

A) extension of credit in the securities industry 
B) establishment of the Securities and Exchange Commission 
C) regulation of new issues of securities 
D) all of the above 
A) extension of credit in the securities industry 
B) establishment of the Securities and Exchange Commission 
C) regulation of new issues of securities 
D) all of the above

Question 15

A wealth investor gives Bubba discretion to invest $50,000 for him in any way Bubba sees fit. Therefore, Bubba must:

Accepted Answer

A) a registered representative with the SEC under the Investment Advisors Act of 1940 
B) conform to the prudent man requirements in that state 
C) furnish written documents of authority to the brokerage firm executing the orders 
D) be registered with the NYSE and FINRA as a representative 
A) a registered representative with the SEC under the Investment Advisors Act of 1940 
B) conform to the prudent man requirements in that state 
C) furnish written documents of authority to the brokerage firm executing the orders 
D) be registered with the NYSE and FINRA as a representative

Question 16

A provision under which an underwriter can cancel a proposed public offering due to some unforeseen occurrence is known as a:

Accepted Answer

A) blue sky provision 
B) contra-market clause 
C) fill or kill provision 
D) market-out clause 
A) blue sky provision 
B) contra-market clause 
C) fill or kill provision 
D) market-out clause

Question 17

In comparing the premium cost of a LEAPS option with a premium of a traditional option on the same security and same strike price, which of the following is generally true?

Accepted Answer

A) the premiums will be approximately the same 
B) the LEAPS premium will be higher than the traditional option premium 
C) the premium for the traditional option will be higher than the LEAPS option premium 
D) LEAPS premiums do not consider time value 
A) the premiums will be approximately the same 
B) the LEAPS premium will be higher than the traditional option premium 
C) the premium for the traditional option will be higher than the LEAPS option premium 
D) LEAPS premiums do not consider time value

Question 18

In which of the following is not a case where a deed to a condominium qualifies as a security?

Accepted Answer

A) the seller intends to profit 
B) there is management by someone other than the owner 
C) there is a time and space rental pool 
D) there is a 14-day owner usage provision 
A) the seller intends to profit 
B) there is management by someone other than the owner 
C) there is a time and space rental pool 
D) there is a 14-day owner usage provision

Question 19

The principal underwriter of an open-end investment company is frequently called:

Accepted Answer

A) participating investment advisor 
B) sponsor 
C) selling group member 
D) investment counselor 
A) participating investment advisor 
B) sponsor 
C) selling group member 
D) investment counselor

Question 20

Under Regulation T of the Federal Reserve, when may a broker overlook an amount due in a customer's account?

Accepted Answer

A) if it does not exceed $1,000 
B) if the client makes a request in writing 
C) if the value of a trade is less than $1,000 
D) under no circumstances 
A) if it does not exceed $1,000 
B) if the client makes a request in writing 
C) if the value of a trade is less than $1,000 
D) under no circumstances

What does the following mean when printed on the stock exchange ticker tape?

What is the name for the rate of discount from the list price that is paid to a municipal securities underwriting group member for its sales participation?

The Bubba Corporation has 50,000 outstanding shares and holds 20,000 shares as treasury stock. At the end of the third quarter $450,000 is distributed as a dividend on the common. How much is the dividend per share?

The term "mutual fund" is popularly used for which of the following?

The gross spread in a new issue depends upon which of the following?

Bubba is age 54 and has investments in a retirement plan with his former employer valued at $104,500. Bubba withdraws $25,000 to open a retail clothing store. Which of the following statements is true regarding Bubba's tax consequences?

Which of the following is not an intangible drilling cost?

Bubba is a registered representative who wishes to buy shares of a new issue his firm is distributing. Under FINRA Conduct Rules, Bubba may:

Which of the following option positions is indicative of the same class of option?

Bubba wishes to invest $50,000 in three mutual funds offered by different underwriters with growth as the main objective. A recommendation to purchase only one such fund for $50,000 might be more suitable to Bubba if:

Bubba has not existing positions in his account and writes 1 XYZ July 60 put and 1 XYZ July 60 call. What is this position called?

In the offering of new securities, members of the syndicate are permitted to sell to other dealers less the reallowance. The amount of the reallowance is determined by:

The Securities Act of 1933 provides for:

A wealth investor gives Bubba discretion to invest $50,000 for him in any way Bubba sees fit. Therefore, Bubba must:

A provision under which an underwriter can cancel a proposed public offering due to some unforeseen occurrence is known as a:

In comparing the premium cost of a LEAPS option with a premium of a traditional option on the same security and same strike price, which of the following is generally true?

In which of the following is not a case where a deed to a condominium qualifies as a security?

The principal underwriter of an open-end investment company is frequently called:

Under Regulation T of the Federal Reserve, when may a broker overlook an amount due in a customer's account?

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

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Exam 2: Investment and Securities

What does the following mean when printed on the stock exchange ticker tape?

What is the name for the rate of discount from the list price that is paid to a municipal securities underwriting group member for its sales participation?

The Bubba Corporation has 50,000 outstanding shares and holds 20,000 shares as treasury stock. At the end of the third quarter $450,000 is distributed as a dividend on the common. How much is the dividend per share?

The term "mutual fund" is popularly used for which of the following?

The gross spread in a new issue depends upon which of the following?

Bubba is age 54 and has investments in a retirement plan with his former employer valued at $104,500. Bubba withdraws $25,000 to open a retail clothing store. Which of the following statements is true regarding Bubba's tax consequences?

Which of the following is not an intangible drilling cost?

Bubba is a registered representative who wishes to buy shares of a new issue his firm is distributing. Under FINRA Conduct Rules, Bubba may:

Which of the following option positions is indicative of the same class of option?

Bubba wishes to invest $50,000 in three mutual funds offered by different underwriters with growth as the main objective. A recommendation to purchase only one such fund for $50,000 might be more suitable to Bubba if:

Bubba has not existing positions in his account and writes 1 XYZ July 60 put and 1 XYZ July 60 call. What is this position called?

In the offering of new securities, members of the syndicate are permitted to sell to other dealers less the reallowance. The amount of the reallowance is determined by:

The Securities Act of 1933 provides for:

A wealth investor gives Bubba discretion to invest $50,000 for him in any way Bubba sees fit. Therefore, Bubba must:

A provision under which an underwriter can cancel a proposed public offering due to some unforeseen occurrence is known as a:

In comparing the premium cost of a LEAPS option with a premium of a traditional option on the same security and same strike price, which of the following is generally true?

In which of the following is not a case where a deed to a condominium qualifies as a security?

The principal underwriter of an open-end investment company is frequently called:

Under Regulation T of the Federal Reserve, when may a broker overlook an amount due in a customer's account?

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters