Question 1

Which of the following does not describe an underwriting procedure?

Accepted Answer

A) best efforts 
B) all or none 
C) standby 
D) fill or kill 
A) best efforts 
B) all or none 
C) standby 
D) fill or kill

Question 2

An option that permits the holder to exercise the contract only at expiration is referred to as:

Accepted Answer

A) European style 
B) American style 
C) Nordic style 
D) Asian style 
A) European style 
B) American style 
C) Nordic style 
D) Asian style

Question 3

Bubba's margin account has $2,000 of SMA. If he buys $10,000 of new securities, how much additional cash must he deposit assuming a Reg T requirement of 50%?

Accepted Answer

A) $3,000 
B) $4,800 
C) $5,000 
D) $6,000 
A) $3,000 
B) $4,800 
C) $5,000 
D) $6,000

Question 4

Which of the following items is not deducted to determine a corporation's net income?

Accepted Answer

A) taxes 
B) dividends 
C) interest 
D) all of the above 
A) taxes 
B) dividends 
C) interest 
D) all of the above

Question 5

Bubba owns stock with cumulative voting rights. There are five vacancies on a board and he owns 100 shares of stock. Bubba is entitled to cast the following votes:

Accepted Answer

A) a total of 100 votes 
B) a total of 100 votes per 
C) a total of 500 votes 
D) you are not allowed to vote 
A) a total of 100 votes 
B) a total of 100 votes per 
C) a total of 500 votes 
D) you are not allowed to vote

Question 6

Bubba buys a municipal bond at a discount and holds it to maturity. Which of the following is true?

Accepted Answer

A) interest is taxable as ordinary income 
B) the capital gain is tax exempt 
C) interest is tax exempt, but the capital gain is taxable 
D) the capital gain is tax exempt, but the interest is taxable as ordinary income 
A) interest is taxable as ordinary income 
B) the capital gain is tax exempt 
C) interest is tax exempt, but the capital gain is taxable 
D) the capital gain is tax exempt, but the interest is taxable as ordinary income

Question 7

How many days after the settlement date must a broker/dealer "buy in" a customer who has failed to deliver securities?

Accepted Answer

A) 10 days 
B) 15 days 
C) 30 days 
D) 45 days 
A) 10 days 
B) 15 days 
C) 30 days 
D) 45 days

Question 8

When the Federal Reserve lowers reserve requirements, what is it attempting to do?

Accepted Answer

A) ease credit 
B) raise interest rates 
C) counter inflation 
D) increase the rediscount rate 
A) ease credit 
B) raise interest rates 
C) counter inflation 
D) increase the rediscount rate

Question 9

Which of the following is not a characteristic of treasury bills?

Accepted Answer

A) they are quoted on yield-to-maturity percentages 
B) their payments are exempt from state income tax 
C) the bid price is higher than the offer price 
D) they mature one to three years from the date of issuance 
A) they are quoted on yield-to-maturity percentages 
B) their payments are exempt from state income tax 
C) the bid price is higher than the offer price 
D) they mature one to three years from the date of issuance

Question 10

What is the maximum amount of gift to customers or other individuals related to the securities business that a registered representative is permitted to give?

Accepted Answer

A) $500 
B) $200 
C) $100 
D) $50 
A) $500 
B) $200 
C) $100 
D) $50

Question 11

The Bubba Insurance Company is not incorporated. It consists of Bubba and his two brothers as general partners, who maintain an active securities account in the name of the company. If one of the partners should suddenly die, what course of actions should be undertaken by the registered representative at the brokerage?

Accepted Answer

A) freeze the account from further activity until a death certificate and new partnership agreement are furnished to the brokerage 
B) no special action is required because the death of a single partner does not terminate the partnership agreement 
C) distribute the assets in the account to the surviving partners 
D) execute sell orders but do not accept buy orders or distribute assets from the account until a new partnership agreement is provided to the brokerage 
A) freeze the account from further activity until a death certificate and new partnership agreement are furnished to the brokerage 
B) no special action is required because the death of a single partner does not terminate the partnership agreement 
C) distribute the assets in the account to the surviving partners 
D) execute sell orders but do not accept buy orders or distribute assets from the account until a new partnership agreement is provided to the brokerage

Question 12

If a customer dies, the registered representative is required to:

Accepted Answer

A) cancel all open (good 'til cancelled) orders 
B) await instructions and necessary papers from the executor of the estate 
C) sell out the account 
D) both A and B 
A) cancel all open (good 'til cancelled) orders 
B) await instructions and necessary papers from the executor of the estate 
C) sell out the account 
D) both A and B

Question 13

Bonds are most often quoted as a percentage of:

Accepted Answer

A) face value 
B) book value 
C) market value 
D) whatever value the broker says 
A) face value 
B) book value 
C) market value 
D) whatever value the broker says

Question 14

With respect to the public offering of securities by an underwriting syndicate, which of the following is true?

Accepted Answer

A) the underwriting spread is greater than the selling concession 
B) the reallowance is greater than the selling concession 
C) the selling concession is greater than the underwriting spread 
D) the reallowance is greater than the underwriting spread 
A) the underwriting spread is greater than the selling concession 
B) the reallowance is greater than the selling concession 
C) the selling concession is greater than the underwriting spread 
D) the reallowance is greater than the underwriting spread

Question 15

The FINRA markup policy applies to:

Accepted Answer

A) agency sales OTC 
B) principal transactions in municipal bonds 
C) mutual fund sales 
D) new issues of corporate securities 
A) agency sales OTC 
B) principal transactions in municipal bonds 
C) mutual fund sales 
D) new issues of corporate securities

Question 16

If the Federal Reserve wished to ease credit, which of the following steps would it take?

Accepted Answer

A) raise the discount rate 
B) purchase securities in the open market 
C) lower reserve requirements 
D) both B and C 
A) raise the discount rate 
B) purchase securities in the open market 
C) lower reserve requirements 
D) both B and C

Question 17

Municipal bonds would be least attractive as an investment for which of the following?

Accepted Answer

A) an insurance company 
B) a pension fund 
C) a commercial bank 
D) the executive officer of an industrial corporation in the highest income tax bracket 
A) an insurance company 
B) a pension fund 
C) a commercial bank 
D) the executive officer of an industrial corporation in the highest income tax bracket

Question 18

Bubba buys one XYZ September 50 call at $7 and sells one XYZ September 60 call at $3. At that time, XYZ stock is at $55. Bubba has no other stock positions. What is Bubba's maximum possible profit?

Accepted Answer

A) $500 
B) $600 
C) $1,000 
D) unlimited 
A) $500 
B) $600 
C) $1,000 
D) unlimited

Question 19

The public offering price of the securities of an open-end management investment company is:

Accepted Answer

A) determined by a method set forth in the prospectus of the issuer 
B) based upon net asset value of the securities underlying the shares of the issuer plus a 10 % sales charge 
C) determined by the relative demand for the shares of the issuer 
D) the price used by distributors in determining sales incentive discounts to individual purchasers 
A) determined by a method set forth in the prospectus of the issuer 
B) based upon net asset value of the securities underlying the shares of the issuer plus a 10 % sales charge 
C) determined by the relative demand for the shares of the issuer 
D) the price used by distributors in determining sales incentive discounts to individual purchasers

Question 20

The practice of positioning stock in response to a customer's order and immediately after marking it up for resale to the customer is:

Accepted Answer

A) a factor to consider in the FINRA guideline 
B) a simultaneous transaction 
C) a riskless transaction 
D) all of the above 
A) a factor to consider in the FINRA guideline 
B) a simultaneous transaction 
C) a riskless transaction 
D) all of the above

Which of the following does not describe an underwriting procedure?

An option that permits the holder to exercise the contract only at expiration is referred to as:

Bubba's margin account has $2,000 of SMA. If he buys $10,000 of new securities, how much additional cash must he deposit assuming a Reg T requirement of 50%?

Which of the following items is not deducted to determine a corporation's net income?

Bubba owns stock with cumulative voting rights. There are five vacancies on a board and he owns 100 shares of stock. Bubba is entitled to cast the following votes:

Bubba buys a municipal bond at a discount and holds it to maturity. Which of the following is true?

How many days after the settlement date must a broker/dealer "buy in" a customer who has failed to deliver securities?

When the Federal Reserve lowers reserve requirements, what is it attempting to do?

Which of the following is not a characteristic of treasury bills?

What is the maximum amount of gift to customers or other individuals related to the securities business that a registered representative is permitted to give?

If a customer dies, the registered representative is required to:

Bonds are most often quoted as a percentage of:

With respect to the public offering of securities by an underwriting syndicate, which of the following is true?

The FINRA markup policy applies to:

If the Federal Reserve wished to ease credit, which of the following steps would it take?

Municipal bonds would be least attractive as an investment for which of the following?

Bubba buys one XYZ September 50 call at $7 and sells one XYZ September 60 call at $3. At that time, XYZ stock is at $55. Bubba has no other stock positions. What is Bubba's maximum possible profit?

The public offering price of the securities of an open-end management investment company is:

The practice of positioning stock in response to a customer's order and immediately after marking it up for resale to the customer 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 does not describe an underwriting procedure?

An option that permits the holder to exercise the contract only at expiration is referred to as:

Bubba's margin account has $2,000 of SMA. If he buys $10,000 of new securities, how much additional cash must he deposit assuming a Reg T requirement of 50%?

Which of the following items is not deducted to determine a corporation's net income?

Bubba owns stock with cumulative voting rights. There are five vacancies on a board and he owns 100 shares of stock. Bubba is entitled to cast the following votes:

Bubba buys a municipal bond at a discount and holds it to maturity. Which of the following is true?

How many days after the settlement date must a broker/dealer "buy in" a customer who has failed to deliver securities?

When the Federal Reserve lowers reserve requirements, what is it attempting to do?

Which of the following is not a characteristic of treasury bills?

What is the maximum amount of gift to customers or other individuals related to the securities business that a registered representative is permitted to give?

If a customer dies, the registered representative is required to:

Bonds are most often quoted as a percentage of:

With respect to the public offering of securities by an underwriting syndicate, which of the following is true?

The FINRA markup policy applies to:

If the Federal Reserve wished to ease credit, which of the following steps would it take?

Municipal bonds would be least attractive as an investment for which of the following?

Bubba buys one XYZ September 50 call at $7 and sells one XYZ September 60 call at $3. At that time, XYZ stock is at $55. Bubba has no other stock positions. What is Bubba's maximum possible profit?

The public offering price of the securities of an open-end management investment company is:

The practice of positioning stock in response to a customer's order and immediately after marking it up for resale to the customer is:

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters