Equites

Question 1

An RR has a customer whose primary objectives are investment income and capital appreiciation. Which option would meet the customer’s objectives

A. A growth stock
B. A warrant
C. A Reit

Answer 1

C. A REIT

They provide income via dividends and offer potential appreciation.

Question 2

Which of the following is NOT an example of a defensive industry?

A. Pharmaceutical
B. Building material
C. Food retail

Answer 2

B. Building material

Building material is a cyclical.

Question 3

Which of the following industries is most cyclical?

A. Tobacco
B. Natural gas
C. Home appliances

Answer 3

C. Home appliances

The are big ticket items, and their purchases rise and fall with the economy.

Question 4

A customer wants to invest in preferred stock. His key objectives is to earn contestant dividend from his investment. which is the best option for the customer?

A. Cumulative
B. Participating
C. Callable

Answer 4

A. Cumulative

Because all dividends must be paid to this investor.

Question 5

All of the following securities are exempt under the securities Act of 1933 EXCEPT?

A. Common stock of savings and loan associations
B. State and municipal securities
C. Real Estate investment trust.

Answer 5

C. Real estate investment trust

Question 6

Which of the following companies is the most likely to pay a stock dividend?

A. A company with earnings growing 3% per year

B. A company with 20% of it’s assets in cash and earnings growing at 5% per year.

C. A company with a small cash balance and earnings growing at 20% per year.

Answer 6

C. A company with a small cash balance.

A company with a small cash balance would most likely pay a dividend.

Question 7

Normally, a stock will begin trading ex-dividend on the?

A. Business day prior to the record date

B. Second business day prior to the payable date.

C. Record date

Answer 7

C. Record date

Regular way settlement is trade date plus 1 business day, the ex date occurs on the same business day as the record date.

Question 8

A company has been in arrears on dividend payments for three quarters. Which shareholders should be paid last?

A. Callable preferred
B. Common stock
C. Cumulative

Answer 8

B. Common stock

All classes of preferred stock must be paid before common.

Question 9

Which of the following would probably be most leveraged?

A. A chemical company
B. A Utility
C. A Steel company

Answer 9

B. Utility