Question 1

Bubba opens a margin account and sells short 100 shares of XYZ at $50. Assuming a Reg T requirement of 50%, what is the opening balance in Bubba's account?

Accepted Answer

A) $10,000 
B) $7,500 
C) $5,000 
D) $2,500 
A) $10,000 
B) $7,500 
C) $5,000 
D) $2,500

Question 2

When a corporation issues a nonconvertible debenture, what is the effect upon its net worth?

Accepted Answer

A) it increases 
B) if decreases 
C) if is unchanged 
D) none of the above 
A) it increases 
B) if decreases 
C) if is unchanged 
D) none of the above

Question 3

Common stocks for which of the following industries are most likely to decline in value when interest rates rise?

Accepted Answer

A) automobile manufacturers 
B) airlines 
C) stock brokers 
D) public utility companies 
A) automobile manufacturers 
B) airlines 
C) stock brokers 
D) public utility companies

Question 4

Regulation A permits a short form of filing for offerings of new securities provided the total amount of the offering does not exceed:

Accepted Answer

A) $1,000,000 
B) $5,000,000 
C) $2,000,000 
D) $2,500,000 
A) $1,000,000 
B) $5,000,000 
C) $2,000,000 
D) $2,500,000

Question 5

Which of the following activities by a limited partner may subject the partner to unlimited liability?

Accepted Answer

A) participating in management of the partnership 
B) committing the partnership in any manner 
C) making loans beyond those specified in the partnership agreement 
D) all of the above 
A) participating in management of the partnership 
B) committing the partnership in any manner 
C) making loans beyond those specified in the partnership agreement 
D) all of the above

Question 6

A large manufacturing company has current assets of approximately $9,400,000 and current liabilities of about $4,900,000. Which of the following statements is true about the current ratio?

Accepted Answer

A) it is substantially below the standard minimum 
B) it is somewhat below the standard minimum 
C) it is about the standard minimum 
D) it is somewhat above the standard minimum 
A) it is substantially below the standard minimum 
B) it is somewhat below the standard minimum 
C) it is about the standard minimum 
D) it is somewhat above the standard minimum

Question 7

What type of mutual fund would invest in equities and bonds?

Accepted Answer

A) dual purpose 
B) balanced 
C) technology 
D) growth 
A) dual purpose 
B) balanced 
C) technology 
D) growth

Question 8

Which of the following has the least active secondary market:

Accepted Answer

A) treasury bills 
B) banker's acceptances 
C) certificates of deposit 
D) commercial paper 
A) treasury bills 
B) banker's acceptances 
C) certificates of deposit 
D) commercial paper

Question 9

In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600. In April, Bubba exercises the put option and uses his stock for delivery. What is his resulting tax consequence?

Accepted Answer

A) a $600 capital loss 
B) neither profit nor loss 
C) cannot be determined without knowing the market price of XYZ upon exercise 
D) this is a wash sale and cannot be included in the investor's tax calculations 
A) a $600 capital loss 
B) neither profit nor loss 
C) cannot be determined without knowing the market price of XYZ upon exercise 
D) this is a wash sale and cannot be included in the investor's tax calculations

Question 10

The registration requirements of the federal securities acts are intended to protect the public interest by providing for a prospectus on new issues and its review by the SEC. Which of the following is the true of this process?

Accepted Answer

A) It provides the SEC with adequate information on which to base approval for new issues 
B) It does not imply SEC approval of the issue 
C) It guarantees purchasers against an untrue statement of material fact or an omission of material fact 
D) It relieves participating underwriters from any further responsibility for checking essential facts before recommending purchase to the customers 
A) It provides the SEC with adequate information on which to base approval for new issues 
B) It does not imply SEC approval of the issue 
C) It guarantees purchasers against an untrue statement of material fact or an omission of material fact 
D) It relieves participating underwriters from any further responsibility for checking essential facts before recommending purchase to the customers

Question 11

Which of the following is normally the largest asset of a manufacturing company?

Accepted Answer

A) sales 
B) inventory 
C) accounts receivable 
D) notes receivable 
A) sales 
B) inventory 
C) accounts receivable 
D) notes receivable

Question 12

Under a leaseback arrangement used to finance construction of local schools, who is the issuer of the municipal bonds?

Accepted Answer

A) the state in which the schools are located 
B) the local school district 
C) a legal authority created for this purpose 
D) a public housing authority commissioned by the federal government 
A) the state in which the schools are located 
B) the local school district 
C) a legal authority created for this purpose 
D) a public housing authority commissioned by the federal government

Question 13

Bubba wants to buy a US treasury bond with a bid of 97.28 and an asking of 98.2. How were these prices established?

Accepted Answer

A) by the FINRA 
B) by the Federal Reserve Board 
C) by competitive biding 
D) by the terms of the bond 
A) by the FINRA 
B) by the Federal Reserve Board 
C) by competitive biding 
D) by the terms of the bond

Question 14

Most publicly owned securities are:

Accepted Answer

A) listed 
B) over-the-counter 
C) unregistered 
D) exempt from SEC registration requirements 
A) listed 
B) over-the-counter 
C) unregistered 
D) exempt from SEC registration requirements

Question 15

Under which of the following conditions are homeowners most likely to refinance existing mortgages?

Accepted Answer

A) when interest rates rise 
B) when interest rates fall 
C) when interest rates are stable 
D) when the yield curve is inverted 
A) when interest rates rise 
B) when interest rates fall 
C) when interest rates are stable 
D) when the yield curve is inverted

Question 16

A registered representative just accepted Bubba's instructions to buy a specific stock in the over-the-counter market with the credit balance in his account. Which of these orders for that issue can be entered and executed on a single ticket in a typical broker/dealer organization?

Accepted Answer

A) buy 150 XYZ at market 
B) buy 150 XYZ at 17.50 or better 
C) buy $2,500 worth of a mutual fund XYZ Corporation 
D) all of these 
A) buy 150 XYZ at market 
B) buy 150 XYZ at 17.50 or better 
C) buy $2,500 worth of a mutual fund XYZ Corporation 
D) all of these

Question 17

Bubba's order to purchase investment company shares must be executed at a price based upon the net asset value of the shares:

Accepted Answer

A) next computed after receipt of the order by the dealer 
B) last computed before receipt of the order by the dealer 
C) computed the previous day at the close of the NYSE 
D) computed the same day the order is received by the dealer 
A) next computed after receipt of the order by the dealer 
B) last computed before receipt of the order by the dealer 
C) computed the previous day at the close of the NYSE 
D) computed the same day the order is received by the dealer

Question 18

Which of the following pairs of terms are synonyms in connection with most mutual funds?

Accepted Answer

A) net asset value and offering price 
B) selling price and bid price 
C) net asset value and redemption price 
D) bid price and management fee 
A) net asset value and offering price 
B) selling price and bid price 
C) net asset value and redemption price 
D) bid price and management fee

Question 19

For a self-employed individual's retirement plan, ERISA permits an investment in which of the following?

Accepted Answer

A) a unit investment trust 
B) a variable annuity 
C) a US Treasury bond 
D) all of the above 
A) a unit investment trust 
B) a variable annuity 
C) a US Treasury bond 
D) all of the above

Question 20

Which of the following is not a practice of a mutual fund custodian?

Accepted Answer

A) changing shareholder registrations on the fund's records 
B) disbursing dividends and capital gains to the fund's shareholders 
C) lending the fund's securities to banks or broker/dealers 
D) maintaining sales records for the fund's underwriter 
A) changing shareholder registrations on the fund's records 
B) disbursing dividends and capital gains to the fund's shareholders 
C) lending the fund's securities to banks or broker/dealers 
D) maintaining sales records for the fund's underwriter

Bubba opens a margin account and sells short 100 shares of XYZ at $50. Assuming a Reg T requirement of 50%, what is the opening balance in Bubba's account?

When a corporation issues a nonconvertible debenture, what is the effect upon its net worth?

Common stocks for which of the following industries are most likely to decline in value when interest rates rise?

Regulation A permits a short form of filing for offerings of new securities provided the total amount of the offering does not exceed:

Which of the following activities by a limited partner may subject the partner to unlimited liability?

A large manufacturing company has current assets of approximately $9,400,000 and current liabilities of about $4,900,000. Which of the following statements is true about the current ratio?

What type of mutual fund would invest in equities and bonds?

Which of the following has the least active secondary market:

In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600. In April, Bubba exercises the put option and uses his stock for delivery. What is his resulting tax consequence?

The registration requirements of the federal securities acts are intended to protect the public interest by providing for a prospectus on new issues and its review by the SEC. Which of the following is the true of this process?

Which of the following is normally the largest asset of a manufacturing company?

Under a leaseback arrangement used to finance construction of local schools, who is the issuer of the municipal bonds?

Bubba wants to buy a US treasury bond with a bid of 97.28 and an asking of 98.2. How were these prices established?

Most publicly owned securities are:

Under which of the following conditions are homeowners most likely to refinance existing mortgages?

A registered representative just accepted Bubba's instructions to buy a specific stock in the over-the-counter market with the credit balance in his account. Which of these orders for that issue can be entered and executed on a single ticket in a typical broker/dealer organization?

Bubba's order to purchase investment company shares must be executed at a price based upon the net asset value of the shares:

Which of the following pairs of terms are synonyms in connection with most mutual funds?

For a self-employed individual's retirement plan, ERISA permits an investment in which of the following?

Which of the following is not a practice of a mutual fund custodian?

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

Bubba opens a margin account and sells short 100 shares of XYZ at $50. Assuming a Reg T requirement of 50%, what is the opening balance in Bubba's account?

When a corporation issues a nonconvertible debenture, what is the effect upon its net worth?

Common stocks for which of the following industries are most likely to decline in value when interest rates rise?

Regulation A permits a short form of filing for offerings of new securities provided the total amount of the offering does not exceed:

Which of the following activities by a limited partner may subject the partner to unlimited liability?

A large manufacturing company has current assets of approximately $9,400,000 and current liabilities of about $4,900,000. Which of the following statements is true about the current ratio?

What type of mutual fund would invest in equities and bonds?

Which of the following has the least active secondary market:

In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600. In April, Bubba exercises the put option and uses his stock for delivery. What is his resulting tax consequence?

The registration requirements of the federal securities acts are intended to protect the public interest by providing for a prospectus on new issues and its review by the SEC. Which of the following is the true of this process?

Which of the following is normally the largest asset of a manufacturing company?

Under a leaseback arrangement used to finance construction of local schools, who is the issuer of the municipal bonds?

Bubba wants to buy a US treasury bond with a bid of 97.28 and an asking of 98.2. How were these prices established?

Most publicly owned securities are:

Under which of the following conditions are homeowners most likely to refinance existing mortgages?

A registered representative just accepted Bubba's instructions to buy a specific stock in the over-the-counter market with the credit balance in his account. Which of these orders for that issue can be entered and executed on a single ticket in a typical broker/dealer organization?

Bubba's order to purchase investment company shares must be executed at a price based upon the net asset value of the shares:

Which of the following pairs of terms are synonyms in connection with most mutual funds?

For a self-employed individual's retirement plan, ERISA permits an investment in which of the following?

Which of the following is not a practice of a mutual fund custodian?

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters