EXAM 1 Flashcards
Prior to the maturity of a variable-rate demand obligation, an investor has the right to receive the:
Par value plus accrued interest
What is true concerning ECNs?
They can be used by investors who want to trade anonymously
A RR’s customer has recently died and her son has come to the BDs office with physical securities. What’s the best course of action for the RR?
Tell the customer to contact the transfer agent since the shares were registered in his mothers name.
Which CMO Tranche provided the greatest safety of principal?
The A tranche
Listed equity options cease trading at:
4:00 pm Eastern Time on the expiration date
Accrued interest on new municipal bonds is calculated from the:
Dated date
A customer sells 1,000 shares of stock and asks for the actual time of execution. For a branch off manager, what is the appropriate action?
To state that the firm is able to provide this information on written request
A muni bond that was issued at par is purchased by an individual in the secondary market at a price of 90. What is the tax consequence if the bond is held to maturity?
$100 ordinary income
The securities that are deposited in an escrow account for an advance refunding of a municipal bond are:
Treasury bonds
A company, which has investors with registration rights, has recently conducted an IPO. Typically, how long must these investors wait to sell their shares after the IPO?
180 days
As it relates to convertible bonds, what provides an arbitrage opportunity?
Stock trading at a premium to parity
Which of the following Moodys ratings is the most speculative investment grade?
A) Aa
B) A
C) Baa
D) Ba
C) Baa
The term that’s used when a company sells stock to the public above par value is:
Paid-in capital
While saving for her retirement, a variable annuity owner investing $1,000 a month will buy a:
Varying number of accumulation units
An investor must pay accrued interest for a secondary market purchase of:
Tax anticipation notes
A firm is not permitted to accept an exercise notice from a customer for a listed equity option after:
5:30 pm Eastern Time on the expiration date of the option
An MIG rating applies to a:
BAN
**MIG ratings apply to muni notes.
In a Delivery Versus Payment (DVP) and Receive Versus Payment (RVP) account, what is required?
A form identifying the third-party agent for the client
What provides backing for a term bond that has a required payment period at maturity?
Sinking fund
Under what circumstances will the payout from a variable annuity increase?
The performance of the separate account exceeds the AIR
Compared to selling short, buying a put option:
Does not require the client to arrange to borrow the stock
A customer who purchases shares of an ETF may be extended credit by a broker dealer when?
Immediately
The determination of when the NAV of a mutual fund is calculated, is stipulated by the:
Prospectus
What is a financial test that ensures a projects revenue is sufficient to make the debt service payments on both existing and proposed bond issues?
Additional bonds covenant
