Question 1

Which of the following securities is traded only in the over-the-counter market?

Accepted Answer

A) corporate bonds 
B) preferred stocks 
C) open-end investment companies 
D) closed-end investment companies 
A) corporate bonds 
B) preferred stocks 
C) open-end investment companies 
D) closed-end investment companies

Question 2

A mutual fund letter of intent may permissibly be predated for a period of time up to:

Accepted Answer

A) 5 business days 
B) 10 business days 
C) 90 calendar days 
D) 13 months 
A) 5 business days 
B) 10 business days 
C) 90 calendar days 
D) 13 months

Question 3

FINRA advertising standards permit a dealer to state that a CMO has an implied AAA rating if the securities are issued:

Accepted Answer

A) with an average life no longer than ten years 
B) by a US government agency 
C) by a private issuer who has not yet received an expected AAA rating 
D) in amounts less than $1,000,000 
A) with an average life no longer than ten years 
B) by a US government agency 
C) by a private issuer who has not yet received an expected AAA rating 
D) in amounts less than $1,000,000

Question 4

An ERISA benefits plan qualified under Section 401(a) of the Internal Revenue Code may:

Accepted Answer

A) purchase any IPO security provided the plan is not sponsored solely by a broker/dealer 
B) apply for an exemption 
C) only purchase securities rated "A" or better 
D) purchase only securities issued by the state or federal government 
A) purchase any IPO security provided the plan is not sponsored solely by a broker/dealer 
B) apply for an exemption 
C) only purchase securities rated "A" or better 
D) purchase only securities issued by the state or federal government

Question 5

A registered representative is given a limited trading authorization by a client. This permits the representative to:

Accepted Answer

A) withdraw money from the account 
B) enter orders for the account at the representative's discretion 
C) withdraw securities from the account 
D) all of the above 
A) withdraw money from the account 
B) enter orders for the account at the representative's discretion 
C) withdraw securities from the account 
D) all of the above

Question 6

What type of security is quoted with a bid price of 4.72 and an asking price of 4.68?

Accepted Answer

A) US treasury note 
B) US treasury bill 
C) US treasury bond 
D) Series H bond 
A) US treasury note 
B) US treasury bill 
C) US treasury bond 
D) Series H bond

Question 7

What is the term applied to a classification of CMO securities having a stated maturity, average life, and estimated yield?

Accepted Answer

A) tranche 
B) tier 
C) bracket 
D) bucket 
A) tranche 
B) tier 
C) bracket 
D) bucket

Question 8

Bubba sells short 100 XYZ at $60 and makes the required Regulation T deposit of 50%. XYZ then rises I price to $65. At this point what is the credit balance?

Accepted Answer

A) $2,500 
B) $3,500 
C) $6,000 
D) $9,000 
A) $2,500 
B) $3,500 
C) $6,000 
D) $9,000

Question 9

Mutual fund salespersons may not represent that a product is like of safer than:

Accepted Answer

A) an insurance policy 
B) a fixed annuity 
C) a corporate debt instrument 
D) all of the above 
A) an insurance policy 
B) a fixed annuity 
C) a corporate debt instrument 
D) all of the above

Question 10

The net investment income of an open-end investment company represents:

Accepted Answer

A) net income from dividends and interest paid on securities in the fund's portfolio 
B) net gains on sales of portfolio securities 
C) dividends, interest, and net gains on sales of securities 
D) net profits from the investment company operation 
A) net income from dividends and interest paid on securities in the fund's portfolio 
B) net gains on sales of portfolio securities 
C) dividends, interest, and net gains on sales of securities 
D) net profits from the investment company operation

Question 11

An investment company acting as a conduit in the distribution of net investment income, pursuant to IRS rules, is called:

Accepted Answer

A) balanced 
B) diversified 
C) regulated 
D) dual-purpose 
A) balanced 
B) diversified 
C) regulated 
D) dual-purpose

Question 12

A registered representative privately assures a customer that a certain stock will double within 18 months. During this period the stock the stock performs as predicted. Which of the following statements is true?

Accepted Answer

A) the commentary was permissible because the stock advanced as the registered representative forecast 
B) this is a violation because the SEC requires all information about stock prices to be publicly announced 
C) this statement constituted a form of fraud prohibited under the Securities Exchange Act of 1934 
D) the comment is permissible only if the representative had been registered with the SEC under the Investment Advisors Act of 1940 
A) the commentary was permissible because the stock advanced as the registered representative forecast 
B) this is a violation because the SEC requires all information about stock prices to be publicly announced 
C) this statement constituted a form of fraud prohibited under the Securities Exchange Act of 1934 
D) the comment is permissible only if the representative had been registered with the SEC under the Investment Advisors Act of 1940

Question 13

Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points. Which of the following orders would be the best recommendation?

Accepted Answer

A) sell limit order 
B) sell stop-limit order 
C) sell stop order 
D) buy stop order 
A) sell limit order 
B) sell stop-limit order 
C) sell stop order 
D) buy stop order

Question 14

Which of the following will not result in termination of a limited partnership?

Accepted Answer

A) transfer of ownership of a limited partnership interest 
B) sale or transfer of partnership assets 
C) majority vote of the limited partners to end the partnership 
D) arrival of the termination date established in the partnership agreement 
A) transfer of ownership of a limited partnership interest 
B) sale or transfer of partnership assets 
C) majority vote of the limited partners to end the partnership 
D) arrival of the termination date established in the partnership agreement

Question 15

On which of the following is depreciation permitted?

Accepted Answer

A) rental property whose value is declining 
B) residential property not used for business 
C) property whose maintenance exceeds the investment credit 
D) equipment subject to recapture 
A) rental property whose value is declining 
B) residential property not used for business 
C) property whose maintenance exceeds the investment credit 
D) equipment subject to recapture

Question 16

Bubba owns a perpetual warrant to buy one share of Internet Corporation common stock at $30. Internet Corporation stock is trading at 41.50 and is ex-dividend today at $0.75. What is the market value of Bubba's warrant?

Accepted Answer

A) 5.75 
B) 5.62 
C) 5.38 
D) cannot be determined from this information 
A) 5.75 
B) 5.62 
C) 5.38 
D) cannot be determined from this information

Question 17

Level III of NASDAQ provides which of the following?

Accepted Answer

A) representative quotations 
B) firm quotations 
C) subject markets 
D) workout markets 
A) representative quotations 
B) firm quotations 
C) subject markets 
D) workout markets

Question 18

A tax-free rollover of assets between qualified retirement plans for the benefit of a specific individual is permitted so long as it is accomplished within:

Accepted Answer

A) 30 days 
B) 60 days 
C) 90 days 
D) one year 
A) 30 days 
B) 60 days 
C) 90 days 
D) one year

Question 19

Bubba decides to buy equity securities. Which of the following statements is always true about what Bubba is buying?

Accepted Answer

A) they are readily marketable 
B) they have a fixed rate of return 
C) they have a fixed maturity date 
D) they are not secured by collateral 
A) they are readily marketable 
B) they have a fixed rate of return 
C) they have a fixed maturity date 
D) they are not secured by collateral

Question 20

A dealer buys 100 shares of XYZ common, which is an actively traded stock, at 23.50. Three days later, when XYZ common is quoted at 19.50 - 19.75, he sells the 100 shares to a customer. The basis for the dealer's markup is:

Accepted Answer

A) 10 5/8 
B) 19 7/8 
C) 23 1/2 
D) 5% above cost 
A) 10 5/8 
B) 19 7/8 
C) 23 1/2 
D) 5% above cost

Which of the following securities is traded only in the over-the-counter market?

A mutual fund letter of intent may permissibly be predated for a period of time up to:

FINRA advertising standards permit a dealer to state that a CMO has an implied AAA rating if the securities are issued:

An ERISA benefits plan qualified under Section 401(a) of the Internal Revenue Code may:

A registered representative is given a limited trading authorization by a client. This permits the representative to:

What type of security is quoted with a bid price of 4.72 and an asking price of 4.68?

What is the term applied to a classification of CMO securities having a stated maturity, average life, and estimated yield?

Bubba sells short 100 XYZ at $60 and makes the required Regulation T deposit of 50%. XYZ then rises I price to $65. At this point what is the credit balance?

Mutual fund salespersons may not represent that a product is like of safer than:

The net investment income of an open-end investment company represents:

An investment company acting as a conduit in the distribution of net investment income, pursuant to IRS rules, is called:

A registered representative privately assures a customer that a certain stock will double within 18 months. During this period the stock the stock performs as predicted. Which of the following statements is true?

Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points. Which of the following orders would be the best recommendation?

Which of the following will not result in termination of a limited partnership?

On which of the following is depreciation permitted?

Bubba owns a perpetual warrant to buy one share of Internet Corporation common stock at $30. Internet Corporation stock is trading at 41.50 and is ex-dividend today at $0.75. What is the market value of Bubba's warrant?

Level III of NASDAQ provides which of the following?

A tax-free rollover of assets between qualified retirement plans for the benefit of a specific individual is permitted so long as it is accomplished within:

Bubba decides to buy equity securities. Which of the following statements is always true about what Bubba is buying?

A dealer buys 100 shares of XYZ common, which is an actively traded stock, at 23.50. Three days later, when XYZ common is quoted at 19.50 - 19.75, he sells the 100 shares to a customer. The basis for the dealer's markup is:

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters

Exam 2: Investment and Securities

Which of the following securities is traded only in the over-the-counter market?

A mutual fund letter of intent may permissibly be predated for a period of time up to:

FINRA advertising standards permit a dealer to state that a CMO has an implied AAA rating if the securities are issued:

An ERISA benefits plan qualified under Section 401(a) of the Internal Revenue Code may:

A registered representative is given a limited trading authorization by a client. This permits the representative to:

What type of security is quoted with a bid price of 4.72 and an asking price of 4.68?

What is the term applied to a classification of CMO securities having a stated maturity, average life, and estimated yield?

Bubba sells short 100 XYZ at $60 and makes the required Regulation T deposit of 50%. XYZ then rises I price to $65. At this point what is the credit balance?

Mutual fund salespersons may not represent that a product is like of safer than:

The net investment income of an open-end investment company represents:

An investment company acting as a conduit in the distribution of net investment income, pursuant to IRS rules, is called:

A registered representative privately assures a customer that a certain stock will double within 18 months. During this period the stock the stock performs as predicted. Which of the following statements is true?

Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points. Which of the following orders would be the best recommendation?

Which of the following will not result in termination of a limited partnership?

On which of the following is depreciation permitted?

Bubba owns a perpetual warrant to buy one share of Internet Corporation common stock at $30. Internet Corporation stock is trading at 41.50 and is ex-dividend today at $0.75. What is the market value of Bubba's warrant?

Level III of NASDAQ provides which of the following?

A tax-free rollover of assets between qualified retirement plans for the benefit of a specific individual is permitted so long as it is accomplished within:

Bubba decides to buy equity securities. Which of the following statements is always true about what Bubba is buying?

A dealer buys 100 shares of XYZ common, which is an actively traded stock, at 23.50. Three days later, when XYZ common is quoted at 19.50 - 19.75, he sells the 100 shares to a customer. The basis for the dealer's markup is:

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters