Question 1

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

Accepted Answer

A) 5.88% 
B) 5.1% 
C) 5.00% 
D) cannot be determined 
A) 5.88% 
B) 5.1% 
C) 5.00% 
D) cannot be determined

Question 2

Bubba is long spot Canadian dollars at 0.7400. If he wants to buy one put option on Canadian dollars with a strike price of 74 and a cost of $0.35, what is Bubba's breakeven price for Canadian dollars?

Accepted Answer

A) 0.4900 
B) 0.7365 
C) 0.7400 
D) .07435 
A) 0.4900 
B) 0.7365 
C) 0.7400 
D) .07435

Question 3

Which of the following has the greatest risk?

Accepted Answer

A) a guaranteed corporate bond 
B) a GNMA bond 
C) a Series H bond 
D) a treasury bill 
A) a guaranteed corporate bond 
B) a GNMA bond 
C) a Series H bond 
D) a treasury bill

Question 4

Bubba has several accounts at a brokerage firm. Which of the following is not covered by SIPC?

Accepted Answer

A) individual account in Bubba's name only 
B) commodities account in Bubba's name only 
C) joint account of Bubba and his wife 
D) joint account of Bubba and his son, Bubba, Jr. 
A) individual account in Bubba's name only 
B) commodities account in Bubba's name only 
C) joint account of Bubba and his wife 
D) joint account of Bubba and his son, Bubba, Jr.

Question 5

In a monthly review of customer statements, Bubba notices that one of his firm's clients has paid for seven purchases five days late. What does he do?

Accepted Answer

A) decides this situation is acceptable provided payment was received before any securities were sold 
B) ascertains whether the client had a sufficient bank balance on settlement date 
C) nothing because this is not a violation provided the securities were not listed on the NYSE 
D) ascertains that extensions had been obtained under Reg T 
A) decides this situation is acceptable provided payment was received before any securities were sold 
B) ascertains whether the client had a sufficient bank balance on settlement date 
C) nothing because this is not a violation provided the securities were not listed on the NYSE 
D) ascertains that extensions had been obtained under Reg T

Question 6

Which of the following preferred issues is likely to fluctuate most in value?

Accepted Answer

A) cumulative preferred 
B) callable preferred 
C) convertible preferred 
D) broker preferred 
A) cumulative preferred 
B) callable preferred 
C) convertible preferred 
D) broker preferred

Question 7

The FINRA markup policy requires that over-the-counter transactions with a customer be at:

Accepted Answer

A) prices reasonably related to the current market price of the security 
B) a markup not to exceed 5% of the current offering price 
C) prices reasonably related to the dealer's cost 
D) a markup based on previous activity in the customer's account 
A) prices reasonably related to the current market price of the security 
B) a markup not to exceed 5% of the current offering price 
C) prices reasonably related to the dealer's cost 
D) a markup based on previous activity in the customer's account

Question 8

Which bond buyer index reflects the lowest average yield for municipal bonds?

Accepted Answer

A) the 50-bond index 
B) the 20-bond index 
C) the 11-bond index 
D) the weekly unsold bond index 
A) the 50-bond index 
B) the 20-bond index 
C) the 11-bond index 
D) the weekly unsold bond index

Question 9

In a 401(k) plan, when are employee's contributions of compensation deferral vested?

Accepted Answer

A) after 2 years 
B) immediately 
C) after 5 years 
D) the same as the employer's contributions 
A) after 2 years 
B) immediately 
C) after 5 years 
D) the same as the employer's contributions

Question 10

Registration of open-end investment company shares with the SEC implies that the:

Accepted Answer

A) shares have investment merit 
B) SEC approves the issue 
C) SEC guarantees the accuracy of the disclosures in the registration statement 
D) prospectus contains the significant facts about the issue 
A) shares have investment merit 
B) SEC approves the issue 
C) SEC guarantees the accuracy of the disclosures in the registration statement 
D) prospectus contains the significant facts about the issue

Question 11

A withdrawal from a Roth IRA may be a qualified distribution if the Roth IRA has been open for at least:

Accepted Answer

A) 90 days 
B) one year 
C) 2 years 
D) 5 years 
A) 90 days 
B) one year 
C) 2 years 
D) 5 years

Question 12

Which of the following may occasionally be purchased at a discount from net assets value?

Accepted Answer

A) no-load funds 
B) closed-end funds 
C) open-end funds 
D) contractual plans 
A) no-load funds 
B) closed-end funds 
C) open-end funds 
D) contractual plans

Question 13

Bubba's margin account has securities valued at $20,000 and an $8,000 credit balance. What is the equity in Bubba's account?

Accepted Answer

A) $8,080 
B) $12,800 
C) $20,000 
D) $28,000 
A) $8,080 
B) $12,800 
C) $20,000 
D) $28,000

Question 14

Bubba is opening a margin account with a member organization. He wishes to purchase 100 shares of XYZ at $15 per share. What is Bubba's initial cash deposit?

Accepted Answer

A) $375 
B) $1,050 
C) $1,500 
D) $2,000 
A) $375 
B) $1,050 
C) $1,500 
D) $2,000

Question 15

Bubba is concerned about the liquidity of a possible municipal bond purchase. He is therefore probably most interested in the rating supplied by which of the following?

Accepted Answer

A) the bond buyers 
B) Moody's 
C) White's 
D) Dow Jones 
A) the bond buyers 
B) Moody's 
C) White's 
D) Dow Jones

Question 16

Approval for a registered investment company to change is investment objective from income to growth is required from which of the following?

Accepted Answer

A) the FINRA 
B) the SEC 
C) a majority of the shareholders 
D) all of the above 
A) the FINRA 
B) the SEC 
C) a majority of the shareholders 
D) all of the above

Question 17

Bubba want to buy a CMO. In general, how often should he expect to receive interest payments?

Accepted Answer

A) every week 
B) every month 
C) every year 
D) at maturity 
A) every week 
B) every month 
C) every year 
D) at maturity

Question 18

Which of the following does not decrease basis?

Accepted Answer

A) cash or property paid out 
B) depletion of real property 
C) losses 
D) income from extraordinary sources 
A) cash or property paid out 
B) depletion of real property 
C) losses 
D) income from extraordinary sources

Question 19

In a best efforts distribution of a new non-exempt issue, a broker/dealer:

Accepted Answer

A) may allow a selling concession to a bank or trust company 
B) agrees to buy the issue at a specified price 
C) is not required to use an offering circular or prospectus 
D) acts as an agent for the issuer 
A) may allow a selling concession to a bank or trust company 
B) agrees to buy the issue at a specified price 
C) is not required to use an offering circular or prospectus 
D) acts as an agent for the issuer

Question 20

Which are the primary considerations in evaluating the worth of a limited partnership?

Accepted Answer

A) the size of the tax deductions 
B) the cost of assets 
C) the adequacy of funding 
D) both B and C 
A) the size of the tax deductions 
B) the cost of assets 
C) the adequacy of funding 
D) both B and C

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

Bubba is long spot Canadian dollars at 0.7400. If he wants to buy one put option on Canadian dollars with a strike price of 74 and a cost of $0.35, what is Bubba's breakeven price for Canadian dollars?

Which of the following has the greatest risk?

Bubba has several accounts at a brokerage firm. Which of the following is not covered by SIPC?

In a monthly review of customer statements, Bubba notices that one of his firm's clients has paid for seven purchases five days late. What does he do?

Which of the following preferred issues is likely to fluctuate most in value?

The FINRA markup policy requires that over-the-counter transactions with a customer be at:

Which bond buyer index reflects the lowest average yield for municipal bonds?

In a 401(k) plan, when are employee's contributions of compensation deferral vested?

Registration of open-end investment company shares with the SEC implies that the:

A withdrawal from a Roth IRA may be a qualified distribution if the Roth IRA has been open for at least:

Which of the following may occasionally be purchased at a discount from net assets value?

Bubba's margin account has securities valued at $20,000 and an $8,000 credit balance. What is the equity in Bubba's account?

Bubba is opening a margin account with a member organization. He wishes to purchase 100 shares of XYZ at $15 per share. What is Bubba's initial cash deposit?

Bubba is concerned about the liquidity of a possible municipal bond purchase. He is therefore probably most interested in the rating supplied by which of the following?

Approval for a registered investment company to change is investment objective from income to growth is required from which of the following?

Bubba want to buy a CMO. In general, how often should he expect to receive interest payments?

Which of the following does not decrease basis?

In a best efforts distribution of a new non-exempt issue, a broker/dealer:

Which are the primary considerations in evaluating the worth of a limited partnership?

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

Bubba is long spot Canadian dollars at 0.7400. If he wants to buy one put option on Canadian dollars with a strike price of 74 and a cost of $0.35, what is Bubba's breakeven price for Canadian dollars?

Which of the following has the greatest risk?

Bubba has several accounts at a brokerage firm. Which of the following is not covered by SIPC?

In a monthly review of customer statements, Bubba notices that one of his firm's clients has paid for seven purchases five days late. What does he do?

Which of the following preferred issues is likely to fluctuate most in value?

The FINRA markup policy requires that over-the-counter transactions with a customer be at:

Which bond buyer index reflects the lowest average yield for municipal bonds?

In a 401(k) plan, when are employee's contributions of compensation deferral vested?

Registration of open-end investment company shares with the SEC implies that the:

A withdrawal from a Roth IRA may be a qualified distribution if the Roth IRA has been open for at least:

Which of the following may occasionally be purchased at a discount from net assets value?

Bubba's margin account has securities valued at $20,000 and an $8,000 credit balance. What is the equity in Bubba's account?

Bubba is opening a margin account with a member organization. He wishes to purchase 100 shares of XYZ at $15 per share. What is Bubba's initial cash deposit?

Bubba is concerned about the liquidity of a possible municipal bond purchase. He is therefore probably most interested in the rating supplied by which of the following?

Approval for a registered investment company to change is investment objective from income to growth is required from which of the following?

Bubba want to buy a CMO. In general, how often should he expect to receive interest payments?

Which of the following does not decrease basis?

In a best efforts distribution of a new non-exempt issue, a broker/dealer:

Which are the primary considerations in evaluating the worth of a limited partnership?

Investment and Bond Market

Assorted Securities and Investments

Uniform Securities Act USA and State Registration Requirements

Filters