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Series 7 > All Chapters > Flashcards

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Series 7 Top-off Exam flashcards
1
Q

List Negotiable Securities

A

Common Stock

Preferred Stock

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2
Q

List Non-negotiable Securities

A

Mutual Funds

Savings Bonds

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3
Q

Preferred stock market Valuation is based on ?

A

Long Term Market Interest Rates

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4
Q

What has a higher yield?

A. Non-convertible Preferred
B. Convertible Preferred

A

A. Non-Convertible Preferred

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5
Q

Warrants have:

Time Value
Instrinic Value

A

Time Value

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6
Q

Securities that trade OTC

A 
Non-Sponsored ADR's
Most Corporate Debt
Government Securities
Agency Securities
Muni Bonds
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7
Q

Exchange traded securities

A

ADR’S

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8
Q 
Common Stock is :
A. Convertible
B. Redeemable
C. Non-Negotiable
D. Non-Callable
A

D. Non- Callable

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9
Q

10% cumulative preferred stock, 2 yrs ago paid 6%, last year paid 7%. this year wishes to pay common. The preferred shareholders must recieve?

A

17%

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10
Q 
Dividends on preferred stock must be paid in:
A. cash
B. common shares of the same issue
C. common shares of another issuer
D. preferred stock of same issuer
A

A. Cash

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11
Q 
Income from which of the following securities is particially tax exempt to a corporate investor?
A. common stock
B. preferred stock
C. preferred stock mutual funds
D. convertible bonds
A

A, B & C

common stock
preferred stock
preffered stock mutual funds

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12
Q

How are corporate and government bonds quotes

A

% of Par basis

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13
Q

municipal serial bonds are quoted:

A

yield basis

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14
Q

Lower Coupon on a bond =

A

Greater Volatility

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15
Q

Longer Maturity =

A

Greater Volatility

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16
Q

Current Yield =

A

Annual Income ÷ Market Price

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17
Q

Long Maturity bond prices move

more. or less.

rapidly than short Maturity

A

More rapidly

18
Q

Low coupon (discount) bond prices move

more. or. less

rapidly than High coupon (premium) bond prices

A

More rapidly

19
Q

The longer the Maturity and the lower the coupon the greater the:

A

Duration

20
Q

Ascending Yield Curve

involves interest rate risk and purchasing power risk

A

maturities lengthen
yields increase
economic expansion when monetary policy is loose

21
Q

Flat yield curve

A

short term rates rise closer to long term levels

22
Q

Inverted Yield Curve

A

Fed Reserve tightens short term credit
short term rates rise above long term
economy is “overheating”

fed raises short term rates to extremely high rates

23
Q

When would you sell corporate bonds and buy government bonds?

A

when a recession is expected, yield spead will widen

24
Q 
Maturity 1-10 Years
Intermediate term- securities
non-callable
semi-annual interest
quoted as a % of par
A

Treasury Notes

25
Q

List 6 Treasury Bond features:

A 
Long-Term, 30yr maturity
minimum demonination $100
semi-annual interest
% of par
quoted in 1/32
non-callable
26
Q

Features of Treasury Receipts:

A

Liquidity Risk
Volatile price swings
repayment of principal @ maturity
Zero Coupon

27
Q

Features of TIPS:

A

fixed interest rate

not subject to purchasing power

28
Q

Features of Treasury Notes:

A

1-10 year maturity
semi-annual interest
quoted in 32nds
non-callable

29
Q

Features of Treasury Bills

A

less than 1 year maturity
issued at a discount from Par
mature at par
quoted on discount yield basis

30
Q

STRIPS protect from:

A

Reinvestment Risk

31
Q

TIPS protect from:

A

Purchase Power Risk

32
Q

ETN- Exchange Traded Notes

A 
set Maturity date
backed by the credit rating of the issuing bank
traded on the exchange
no interest payments
high credit risk
no liquidity risk or reinvestment risk
tax efficiency
structured product
33
Q

What is an original discount obligation

A

FNMA Bond

34
Q

A certificate of deposit that changes the rate of interest based on prevailing market interest rate is a

A

step-up/ step-down CD

35
Q

if iinterest rates decline what will be called?

A

bonds with high interest rates and long maturities

36
Q

monies to meet debt service requirements are depoaited into

A

sinking fund

37
Q

An “in-whole call” is a

A

optional call

38
Q

inverted yield curve what prices are more volatile

short term or long term

A

long term

39
Q

CMO’s

A

serial structure
Rated AAA
more accessible to individual investors than pass through
lower level of market risk than pass throughs

40
Q

under revenue bond rate covenant charges for the use of facility must be set to a level sufficent to cover?

A

operation and maintenance

debt service and mandatory deposits to debt service reserve fund

Series 7 (1 decks)

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