07/7/2022 MOCK TEST Flashcards
What transaction amount would require the filing of a SAR?
$5,000 and appears to serve no business or legal purpose.
What are potential benefits associated with a real estate direct participation program?
tax deductions and credits
In an effort to safeguard customer information which regulation specifies securing desktop and laptop computers and encrypting email?
A; Regulation T
B: Regulation S-P
C: Regulation A+
D: The Securities Exchange Act
B
Contributions to an IRA can be made up to which of date?
April 15th of the year following the year the contributions are for
A customer investing in common equity securities could realize all of the following except:
A: potential hedge fund inflation
B: current income via dividend declarations
C: protection of principal investment
D: potential capital appreciation
C: While common shareholders could realize potential capital appreciation, current income via dividend declarations and a potential hedge against inflation, protection of the initial investment is not guaranteed. Common shareholders have limited liability, meaning that while they cannot lose more than was initially invested, they could still lose all of it.
A market order to buy must be executed when and at what available price?
Immediately, at the lowest price
All the following are lagging indicators except:
A: personal income
B: outstanding commercial loans
C: corporate profits
D: labor cost per unit
A: personal income
What are the two basic types of Section 529 plans, which are products used for higher education?
Savings Plans and Prepaid Tuition Plans
Common stock does not make interest payments
Benjamin Jackson bought 100 shares of XYZ two years ago at $10 per share. The stock paid a $0.50 dividend each year and he sold the stock for $11. What percent was his total return?
A: 20%
B: 10%
C: 5%
D: 50%
A: An investor’s total return is made up of any income received, such as dividends on stock or interest on bonds, plus any gain (or loss) over the holding period. That makes the formula for total return in this question: dividends plus capital gains divided by amount invested. The math looks like this: two years of dividends at $0.50 per year equals $1.00. The stock was purchased for $10 and sold for $11 resulting in a gain of $1.00. Add the $1.00 of income to the $1.00 of gains and then divide the resulting $2.00 by the cost basis of $10.00. This results in a total return of 20% (2/10 = 0.2)
Unless otherwise specified, the size of a firm quote is:
100 Shares
Which of the following best describe a wrap account?
- The firm offering the account would need to be registered as both a broker-dealer and an investment advisor
2: The account fee covers both transactions and advice
3: The wrap fee for the account covers only where the firm acts as a broker or acts as a dealer
4: The firm may only be registered as a broker or dealer
A: 3 and 4
B: 1 and 4
C: 2 and 3
D: 1 and 2
D: The fee covers both the advice and any transaction, so the firm must be registered as both a broker-dealer and an investment advisor.
What kind of investment company has an actively managed portfolio?
Closed-end Company
When must a new options customer return a signed option account agreement form?
Within 15 calendar days of the account approval
John Christensen places a buy limit order at 42 when the market price of the stock is at 45. Which of the following best describes how the order would fill?
A: The order would be filled at the next available price after the stock price drops to 42
B: The order would be filled immediately because the market price is already above 42
C: The order can only be filled at a price of 42 or lower
D: The order would be filled between when the stock price is between 42 and 45
C: Buy limit orders are placed below the current market price and fill at the stated price or lower
The maximum gain on a short call is:
The premium
