Question 1

Which securities do not receive dividends?

Accepted Answer

A) ADRs 
B) warrants 
C) common stock 
D) preferred stock 
A) ADRs 
B) warrants 
C) common stock 
D) preferred stock

Question 2

The most common type of bond issued by a well-established company is:

Accepted Answer

A) a debenture 
B) a senior secured note 
C) a convertible 
D) an open-end mortgage 
A) a debenture 
B) a senior secured note 
C) a convertible 
D) an open-end mortgage

Question 3

In a firm commitment offering, any shares that are not sold are:

Accepted Answer

A) returned to the issuing corporation 
B) listed in the over-the-counter market 
C) transferred to treasury stock 
D) owned by the members of the syndicate 
A) returned to the issuing corporation 
B) listed in the over-the-counter market 
C) transferred to treasury stock 
D) owned by the members of the syndicate

Question 4

Which of the following price quotes is representative of a treasury bill?

Accepted Answer

A) 98.9 - 100 
B) 96 - 96½ 
C) 5.78 - 5.73 
D) 5.55 - 5.75 
A) 98.9 - 100 
B) 96 - 96½ 
C) 5.78 - 5.73 
D) 5.55 - 5.75

Question 5

Bubba Corporation issued bonds that pay interest on January 15 and July 15 each year until maturity. An investor purchasing these bonds on Monday, April 12, must pay the contract price plus accrued interest for:

Accepted Answer

A) 87 days 
B) 89 days 
C) 93 days 
D) 90 days 
A) 87 days 
B) 89 days 
C) 93 days 
D) 90 days

Question 6

Which of the following is not true about US treasury bills?

Accepted Answer

A) they are issued at a discount 
B) they are money market instruments 
C) they are issued in denominations of $1,000 to $1,000,000 
D) they are general obligations of the US government 
A) they are issued at a discount 
B) they are money market instruments 
C) they are issued in denominations of $1,000 to $1,000,000 
D) they are general obligations of the US government

Question 7

Securities may be sold under SEC rule 144 provided that the following conditions are met:

Accepted Answer

A) the company files regular financial data with the SEC 
B) they are sold in agency transactions only 
C) they are sold in principal transactions only 
D) both A and B 
A) the company files regular financial data with the SEC 
B) they are sold in agency transactions only 
C) they are sold in principal transactions only 
D) both A and B

Question 8

Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500. What is the NYSE minimum equity maintenance for this account?

Accepted Answer

A) $5,500 
B) $6,000 
C) $6,600 
D) $12,600 
A) $5,500 
B) $6,000 
C) $6,600 
D) $12,600

Question 9

The general purpose of the Securities Act of 1933 is to:

Accepted Answer

A) regulate the activities of investment advisers 
B) regulate the sale of securities on national exchanges 
C) provide for disclosure of information about new securities offerings 
D) provide for disclosure of the financial condition of underwriters 
A) regulate the activities of investment advisers 
B) regulate the sale of securities on national exchanges 
C) provide for disclosure of information about new securities offerings 
D) provide for disclosure of the financial condition of underwriters

Question 10

When does a call option provide the most value to its holder?

Accepted Answer

A) when the underlying stock is extremely volatile 
B) in the month prior to its expiration 
C) when there is a large open interest in that class of option 
D) when the underlying stock price is rising 
A) when the underlying stock is extremely volatile 
B) in the month prior to its expiration 
C) when there is a large open interest in that class of option 
D) when the underlying stock price is rising

Question 11

Bubba Corporation has a profit sharing plan. The company president, Bubba, is receiving the maximum plan contribution amount. The corporation has one other employee, who is eligible for the plan. If this person earns $12,000 per year, how much must be deposited in the plan for the employee?

Accepted Answer

A) $6,000 
B) $3,000 
C) $1,800 
D) $12,000 
A) $6,000 
B) $3,000 
C) $1,800 
D) $12,000

Question 12

Under what conditions may an FINRA member firm sell an IPO to an employee of another broker/dealer?

Accepted Answer

A) if the amount of the purchase is small and the transaction accords with the employee's normal investment practice 
B) if the member firm notifies the other broker/dealer of the transaction 
C) if the employing broker/dealer guarantees that resale of the securities acquired by its employee will be restricted for two years 
D) under no circumstances 
A) if the amount of the purchase is small and the transaction accords with the employee's normal investment practice 
B) if the member firm notifies the other broker/dealer of the transaction 
C) if the employing broker/dealer guarantees that resale of the securities acquired by its employee will be restricted for two years 
D) under no circumstances

Question 13

Bubba is buying a treasury bill. The discount he receives results in Bubba's determination of:

Accepted Answer

A) face value 
B) nominal yield 
C) rate of return 
D) yield to call 
A) face value 
B) nominal yield 
C) rate of return 
D) yield to call

Question 14

A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering. What subscription ratio is the corporation establishing for each new share?

Accepted Answer

A) 6 rights per share 
B) 10 rights per share 
C) 6 million rights per share 
D) 10 million rights per share 
A) 6 rights per share 
B) 10 rights per share 
C) 6 million rights per share 
D) 10 million rights per share

Question 15

Bubba plans to borrow some money and pledge securities as collateral. Which of the following can he not use as collateral?

Accepted Answer

A) Series EE bonds 
B) US treasury bills 
C) US treasury notes 
D) US treasury bonds 
A) Series EE bonds 
B) US treasury bills 
C) US treasury notes 
D) US treasury bonds

Question 16

Which of the following statements incorrectly describes US securities markets?

Accepted Answer

A) a capital market comprised of long-term debt and equity issues 
B) a money market comprised of short-term debt and equity issues 
C) a municipal market comprised of tax-exempt issues of state and local governments 
D) a government and agency market comprised of both short-term and long-term debt issues 
A) a capital market comprised of long-term debt and equity issues 
B) a money market comprised of short-term debt and equity issues 
C) a municipal market comprised of tax-exempt issues of state and local governments 
D) a government and agency market comprised of both short-term and long-term debt issues

Question 17

In terms of depletion, percentage depletion is better than cost depletion because it:

Accepted Answer

A) permits recovery of more than the original cost 
B) is limited to production 
C) is more widely available 
D) is not subject to recapture 
A) permits recovery of more than the original cost 
B) is limited to production 
C) is more widely available 
D) is not subject to recapture

Question 18

The return by the receiving party of securities previously accepted for delivery or a demand by the delivering party for return of securities that have been delivered is called:

Accepted Answer

A) rejection 
B) close-out 
C) reclamation 
D) re-delivery 
A) rejection 
B) close-out 
C) reclamation 
D) re-delivery

Question 19

In a competitive bidding for mortgage bonds of a large public utility the winning underwriter is determined by:

Accepted Answer

A) the highest dollar amount paid to the issuer 
B) the lowest net interest cost to the issuer 
C) the shortest maturity date for the bonds 
D) the refunding and sinking fund terms in the indenture 
A) the highest dollar amount paid to the issuer 
B) the lowest net interest cost to the issuer 
C) the shortest maturity date for the bonds 
D) the refunding and sinking fund terms in the indenture

Question 20

Who owns a corporation?

Accepted Answer

A) the owners of debentures 
B) the holders of common stock 
C) the holders of common stock and the holders of preferred stock 
D) the government 
A) the owners of debentures 
B) the holders of common stock 
C) the holders of common stock and the holders of preferred stock 
D) the government

Which securities do not receive dividends?

The most common type of bond issued by a well-established company is:

In a firm commitment offering, any shares that are not sold are:

Which of the following price quotes is representative of a treasury bill?

Bubba Corporation issued bonds that pay interest on January 15 and July 15 each year until maturity. An investor purchasing these bonds on Monday, April 12, must pay the contract price plus accrued interest for:

Which of the following is not true about US treasury bills?

Securities may be sold under SEC rule 144 provided that the following conditions are met:

Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500. What is the NYSE minimum equity maintenance for this account?

The general purpose of the Securities Act of 1933 is to:

When does a call option provide the most value to its holder?

Bubba Corporation has a profit sharing plan. The company president, Bubba, is receiving the maximum plan contribution amount. The corporation has one other employee, who is eligible for the plan. If this person earns $12,000 per year, how much must be deposited in the plan for the employee?

Under what conditions may an FINRA member firm sell an IPO to an employee of another broker/dealer?

Bubba is buying a treasury bill. The discount he receives results in Bubba's determination of:

A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering. What subscription ratio is the corporation establishing for each new share?

Bubba plans to borrow some money and pledge securities as collateral. Which of the following can he not use as collateral?

Which of the following statements incorrectly describes US securities markets?

In terms of depletion, percentage depletion is better than cost depletion because it:

The return by the receiving party of securities previously accepted for delivery or a demand by the delivering party for return of securities that have been delivered is called:

In a competitive bidding for mortgage bonds of a large public utility the winning underwriter is determined by:

Who owns a corporation?

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters

Exam 2: Investment and Securities

Which securities do not receive dividends?

The most common type of bond issued by a well-established company is:

In a firm commitment offering, any shares that are not sold are:

Which of the following price quotes is representative of a treasury bill?

Bubba Corporation issued bonds that pay interest on January 15 and July 15 each year until maturity. An investor purchasing these bonds on Monday, April 12, must pay the contract price plus accrued interest for:

Which of the following is not true about US treasury bills?

Securities may be sold under SEC rule 144 provided that the following conditions are met:

Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500. What is the NYSE minimum equity maintenance for this account?

The general purpose of the Securities Act of 1933 is to:

When does a call option provide the most value to its holder?

Bubba Corporation has a profit sharing plan. The company president, Bubba, is receiving the maximum plan contribution amount. The corporation has one other employee, who is eligible for the plan. If this person earns $12,000 per year, how much must be deposited in the plan for the employee?

Under what conditions may an FINRA member firm sell an IPO to an employee of another broker/dealer?

Bubba is buying a treasury bill. The discount he receives results in Bubba's determination of:

A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering. What subscription ratio is the corporation establishing for each new share?

Bubba plans to borrow some money and pledge securities as collateral. Which of the following can he not use as collateral?

Which of the following statements incorrectly describes US securities markets?

In terms of depletion, percentage depletion is better than cost depletion because it:

The return by the receiving party of securities previously accepted for delivery or a demand by the delivering party for return of securities that have been delivered is called:

In a competitive bidding for mortgage bonds of a large public utility the winning underwriter is determined by:

Who owns a corporation?

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters