Comprehensive Exam 1 - Missed Qs Flashcards
Which of the following is not automatically liable to contemporaneous traders for damages?
- The tippee who traded on the information
- The insider who traded on the information
- The employer of a person who conducted insider trading
- The insider who passed the information (the tipper) to someone who traded on the information, but did not conduct insider trading for their own benefit
The employer of a person who conducted insider trading
Chicago, IL issues an IDR that will be used to construct a facility for PEG Corporation, which specializes in manufacturing solar-powered phones. If an individual invests in the IDR, How will the interest be taxed?
Subject to federal AMT if the investor is subject to AMT
Which of the following statements is true when comparing the cumulative voting method to statutory voting?
Minority shareholders have greater voting effectiveness with cumulative voting than under statutory
Which of the following is not required when opening an option account?
A hypothecation agreement - Required only when opening a margin account.
Which type of preferred stock is required to pay all amounts of past dividends that have not yet been paid before they are able to pay dividends to common stock holders.
Cumulative preferred stock - Non cumulative is only required to pay the CY dividend.
Which of the following is not a direct expense of an open-end investment company?
Sales charge - These are not considered operating expenses and are not part of the expense ratio.
A U.S. Treasury bond issue is currently selling at 108.15. The nominal rate is 12%. What is the market value of the bond?
$1,084.69
Which municipal bonds are not backed by taxes, do not need voter approval, and have a feasibility study?
Revenue
Which of the following is not a requirement for an investment company to be registered with the SEC?
An approved 12b-1 fee plan
An investor has an account with a broker-dealer that consists of $500,000 in securities and $200,000 in cash. If the broker-dealer goes bankrupt, for what amount would the investor’s account be protected under the Securities Investor Protection Corporation (SIPC)?
The maximum limit of SIPC coverage for cash and securities for each customer is a total of $500,000. Of the total $500,000, no more than $250,000 can be cash.
Which of the following statements is true regarding an account with a limited non-durable power of attorney trading authorization?
The third party can enter orders in the account - A limited power of attorney allows the third party to place trades, but not remove any assets from the account. A non-durable power of attorney ceases if the client is declared mentally incompetent.
