Question 1

Which of the following holders of unregistered stock is precluded from selling shares under Rule 144?

Accepted Answer

A) an institutional investor 
B) an officer of the issuing corporation 
C) a broker/dealer firm 
D) a holder of more than 10% of the outstanding stock 
A) an institutional investor 
B) an officer of the issuing corporation 
C) a broker/dealer firm 
D) a holder of more than 10% of the outstanding stock

Question 2

What percentage of maintenance charges and debt service are covered by the rate covenant of a revenue bond issued to finance a municipal toll road?

Accepted Answer

A) 75% 
B) 100% 
C) 120% 
D) 150% 
A) 75% 
B) 100% 
C) 120% 
D) 150%

Question 3

If a mutual fund has invested its assets by allocating about one-third each for bonds, preferred stocks, and common stocks, it is identified as:

Accepted Answer

A) an income fund 
B) a specialized fund 
C) a balanced fund 
D) a unit investment trust fund 
A) an income fund 
B) a specialized fund 
C) a balanced fund 
D) a unit investment trust fund

Question 4

Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85. What is the current yield?

Accepted Answer

A) 5.00% 
B) 5.88% 
C) 6.49% 
D) 5.10% 
A) 5.00% 
B) 5.88% 
C) 6.49% 
D) 5.10%

Question 5

Commercial paper is typically issued with a maturity date not exceeding:

Accepted Answer

A) 90 days 
B) 6 months 
C) 270 days 
D) 1 year 
A) 90 days 
B) 6 months 
C) 270 days 
D) 1 year

Question 6

The definition of debentures is:

Accepted Answer

A) a loan secured by real estate 
B) collateralized securities 
C) a worthless security 
D) securities backed by the general credit of the issuers but no specific collateral 
A) a loan secured by real estate 
B) collateralized securities 
C) a worthless security 
D) securities backed by the general credit of the issuers but no specific collateral

Question 7

When a member firm buys or sells securities directly as principal with a public customer, it is acting as:

Accepted Answer

A) a dealer 
B) a broker 
C) an agent 
D) none of the above 
A) a dealer 
B) a broker 
C) an agent 
D) none of the above

Question 8

At the time it underlying stock is trading at 48, Bubba buys a listed call option with a $50 strike price for $300. At what minimum price must that stock trade for Bubba to recover his investment (ignoring commission and taxes)?

Accepted Answer

A) $45 
B) $48 
C) $51 
D) $53 
A) $45 
B) $48 
C) $51 
D) $53

Question 9

Which of the following is not prohibited of a general partner?

Accepted Answer

A) acting in such a way as to impede the orderly business of the partnership 
B) buying or selling assets of the partnership except to foster the business of the partnership 
C) competing in any way with the partnership 
D) accepting compensation from any other partnership 
A) acting in such a way as to impede the orderly business of the partnership 
B) buying or selling assets of the partnership except to foster the business of the partnership 
C) competing in any way with the partnership 
D) accepting compensation from any other partnership

Question 10

A NYSE floor member executing an order for a public customer asks the specialist in the stock to guarantee a price while giving the customer an opportunity to obtain a better price. This procedure is known as:

Accepted Answer

A) a stop order 
B) stopping stock 
C) floor protection 
D) a special deal 
A) a stop order 
B) stopping stock 
C) floor protection 
D) a special deal

Question 11

Bubba Corporation has a registered public offering of 750,000 shares at $40. An underwriter of 30,000 shares is advised by the manager that its retention will be 70%. How many shares may the underwriter sell to its own customers?

Accepted Answer

A) 30,000 
B) 21,000 
C) 9.000 
D) as many as it can up to a maximum of 51,000 
A) 30,000 
B) 21,000 
C) 9.000 
D) as many as it can up to a maximum of 51,000

Question 12

All sales literature and advertising relating to investment company shares prepared by members of FINRA must be filed for review with which of the following?

Accepted Answer

A) Anti-Trust Division of the Justice Department 
B) SEC 
C) Federal Reserve Board 
D) FINRA 
A) Anti-Trust Division of the Justice Department 
B) SEC 
C) Federal Reserve Board 
D) FINRA

Question 13

Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85. What is the yield to maturity using the "rule of thumb" method?

Accepted Answer

A) 5.00% 
B) 5.88% 
C) 5.10% 
D) 6.49% 
A) 5.00% 
B) 5.88% 
C) 5.10% 
D) 6.49%

Question 14

Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
What is Bubba's excess equity in the account?

Accepted Answer

A) $3,000 
B) $18,000 
C) $12,000 
D) $0 
A) $3,000 
B) $18,000 
C) $12,000 
D) $0

Question 15

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 is the subscription price per share?

Accepted Answer

A) $4 
B) $6 
C) $7 
D) $10 
A) $4 
B) $6 
C) $7 
D) $10

Question 16

Which of the following is not true about mutual funds and variable annuities?

Accepted Answer

A) each is regulated under the Investment Company Act of 1940 
B) the holder of each must pay income taxes on the dividends received each year 
C) the registered representative must have FINRA registration to solicit either one 
D) the payout of each depends on the investment results of the securities owned in the portfolio 
A) each is regulated under the Investment Company Act of 1940 
B) the holder of each must pay income taxes on the dividends received each year 
C) the registered representative must have FINRA registration to solicit either one 
D) the payout of each depends on the investment results of the securities owned in the portfolio

Question 17

A public offering by an investment banker in which any securities not sold are returned to the issuer is known as:

Accepted Answer

A) a firm commitment 
B) a best efforts offering 
C) an all or none offering 
D) a contingency offering 
A) a firm commitment 
B) a best efforts offering 
C) an all or none offering 
D) a contingency offering

Question 18

What is the loan value on a call option held in a customer's margin account?

Accepted Answer

A) 0 
B) 50% 
C) 30% 
D) the compliment of the FRB initial margin requirement for listed stocks 
A) 0 
B) 50% 
C) 30% 
D) the compliment of the FRB initial margin requirement for listed stocks

Question 19

Distribution from an IRA can begin at age 59½ and must begin by age:

Accepted Answer

A) 70½ 
B) 65 
C) 68 
D) whenever the individual is retired 
A) 70½ 
B) 65 
C) 68 
D) whenever the individual is retired

Question 20

The agreement between the members of a syndicate and the manager is known as the:

Accepted Answer

A) agreement among underwriters 
B) underwriting agreement 
C) standby agreement 
D) selling agreement 
A) agreement among underwriters 
B) underwriting agreement 
C) standby agreement 
D) selling agreement

Which of the following holders of unregistered stock is precluded from selling shares under Rule 144?

What percentage of maintenance charges and debt service are covered by the rate covenant of a revenue bond issued to finance a municipal toll road?

If a mutual fund has invested its assets by allocating about one-third each for bonds, preferred stocks, and common stocks, it is identified as:

Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85. What is the current yield?

Commercial paper is typically issued with a maturity date not exceeding:

The definition of debentures is:

When a member firm buys or sells securities directly as principal with a public customer, it is acting as:

At the time it underlying stock is trading at 48, Bubba buys a listed call option with a $50 strike price for $300. At what minimum price must that stock trade for Bubba to recover his investment (ignoring commission and taxes)?

Which of the following is not prohibited of a general partner?

A NYSE floor member executing an order for a public customer asks the specialist in the stock to guarantee a price while giving the customer an opportunity to obtain a better price. This procedure is known as:

Bubba Corporation has a registered public offering of 750,000 shares at $40. An underwriter of 30,000 shares is advised by the manager that its retention will be 70%. How many shares may the underwriter sell to its own customers?

All sales literature and advertising relating to investment company shares prepared by members of FINRA must be filed for review with which of the following?

Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85. What is the yield to maturity using the "rule of thumb" method?

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 is the subscription price per share?

Which of the following is not true about mutual funds and variable annuities?

A public offering by an investment banker in which any securities not sold are returned to the issuer is known as:

What is the loan value on a call option held in a customer's margin account?

Distribution from an IRA can begin at age 59½ and must begin by age:

The agreement between the members of a syndicate and the manager is known as the:

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

Which of the following holders of unregistered stock is precluded from selling shares under Rule 144?

What percentage of maintenance charges and debt service are covered by the rate covenant of a revenue bond issued to finance a municipal toll road?

If a mutual fund has invested its assets by allocating about one-third each for bonds, preferred stocks, and common stocks, it is identified as:

Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85. What is the current yield?

Commercial paper is typically issued with a maturity date not exceeding:

The definition of debentures is:

When a member firm buys or sells securities directly as principal with a public customer, it is acting as:

At the time it underlying stock is trading at 48, Bubba buys a listed call option with a $50 strike price for $300. At what minimum price must that stock trade for Bubba to recover his investment (ignoring commission and taxes)?

Which of the following is not prohibited of a general partner?

A NYSE floor member executing an order for a public customer asks the specialist in the stock to guarantee a price while giving the customer an opportunity to obtain a better price. This procedure is known as:

Bubba Corporation has a registered public offering of 750,000 shares at $40. An underwriter of 30,000 shares is advised by the manager that its retention will be 70%. How many shares may the underwriter sell to its own customers?

All sales literature and advertising relating to investment company shares prepared by members of FINRA must be filed for review with which of the following?

Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85. What is the yield to maturity using the "rule of thumb" method?

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 is the subscription price per share?

Which of the following is not true about mutual funds and variable annuities?

A public offering by an investment banker in which any securities not sold are returned to the issuer is known as:

What is the loan value on a call option held in a customer's margin account?

Distribution from an IRA can begin at age 59½ and must begin by age:

The agreement between the members of a syndicate and the manager is known as the:

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters