8

Question 1

What is a mutual fund letter or statement of intent used for?

Answer 1

Qualifying for a lower sales charge when purchasing mutual funds

Question 2

What is a way common equity is diluted?

Answer 2

Convertible securities are converted

Question 3

How many investors can purchase a Regulation D private placement?

Answer 3

• Accredited: unlimited
• Non-accredited: 35

Question 4

What can an associated person not registered with FINRA do?

Answer 4

Select an employee health insurance plan

Question 5

If an option is out of the money then what is the intrinsic value?

Answer 5

0

Question 6

Where are the foreign exchange rates set?

Answer 6

In the Interbank market

Question 7

What is true about annuity units in a variable contract?

Answer 7

The number of units is fixed

Question 8

Who are hedge funds suitable for?

Answer 8

Sophisticated (accredited) investors

Question 9

What are distributions made after 59 1/2 for non-tax qualified retirement plans?

Answer 9

• Partial tax-free return of capital
• Partial taxable income

Question 10

Who can subscribe using preemptive rights?

Answer 10

Common stockholders

Question 11

What does “holding a security in street name” lead to?

Answer 11

• Nominal owner
• Beneficial owner

Question 12

What type of investments are most subject to inflation risk?

Answer 12

Fixed income investments

Question 13

What is the relation between an ADR and the USD?

Answer 13

USD goes up = ADR price falls

Question 14

What is the expense ratio of a mutual fund a measure of?

Answer 14

Operating efficiency

Question 15

What are T-Bills issued at?

Answer 15

A discount

Question 16

How is the spread calculated for a new issue?

Answer 16

POP - amount received by the issuer

Question 17

What does a fixed annuity grow at?

Answer 17

A guaranteed rate

Question 18

If a security is purchased and no customer payment has been received when should they be liquidated?

Answer 18

S+2

Question 19

What bonds are issued in book entry form?

Answer 19

• US government bonds
• Municipal bonds
• Corporate bonds

Question 20

What is true regarding age for an ABLE account?

Answer 20

The disability must begin before 26

Question 21

What can be useful to protect against systematic risk?

Answer 21

Hedging investments

Question 22

What signature is needed when opening an options account?

Answer 22

Registered options principal signature

Question 23

Who regulates ABLE accounts?

Answer 23

MSRB

Question 24

What are Eurodollars

Answer 24

USD deposits held in foreign branches of US banks or foreign banks

Question 25

What does Reg T apply to?

Answer 25

Non-exempt securities

Question 26

What is true about the NAV of closed-end funds?

Answer 26

It can be higher, lower, or the same as the market price

Question 27

How is the price of a fund’s NAV figured out?

Answer 27

Forward pricing

Question 28

What type of risk is an investment exposed to when purchasing an ADR?

Answer 28

Political risk

Question 29

Who is the beneficiary of an ABLE account?

Answer 29

The account owner

Question 30

Under regulation T in a new margin account how much is required to be deposited?

Answer 30

$2,000

Question 31

How is the premium calculated?

Answer 31

Intrinsic value + time value

Question 32

What are call loans secured by

Answer 32

Partially paid securities held in margin accounts of the broker-dealer

Question 33

When an official loses a campaign the MFP can contribute up to what?

Answer 33

An unlimited amount

Question 34

What agency security is directly backed by the US government?

Answer 34

GNMA

Question 35

What do REITs not allow for?

Answer 35

A flow-through of loss

Question 36

What is not a risk of extended hours trading?

Answer 36

Less access to news updates

Question 37

Who is the bond indenture contract between?

Answer 37

• Bond issuer
• Trustee for the benefit of the bondholders