Exam 11 Wrong Answers

Question 1

All of the following are used to properly evaluate the yield-to-maturity of a bond investment except

Answer 1

Current price of the bond

Question 2

The separate for a variable life policy had a 3% rate of return over the past year. The AIR for the policy is 6%. How will this affect the death benefit of the policy?

Answer 2

The death benefit will decrease but not below the face amount of the policy

Question 3

An investor invests $20,000 in a limited partnership. The investor’s share of recourse debt is $80,000. Which of the following is True regarding this investment?

Answer 3

The maximum risk is $100,000

Question 4

Under FINRA by laws, which of the following relates to trade practice violations and enforcement?

Answer 4

The code of procedure

Question 5

Which one of the following parties to an options contract receives the premium and has the obligation to sell the underlying security at the strike price if the option is exercised?

Answer 5

Call writer

Question 6

If a mutual fund with an offering price of $30 does not offer breakpoints, rights of accumulation and dividend reinvestment at NAV to investors, what is the allowable maximum sales charge?

Answer 6

6.25% or $1.88

Question 7

If an investor owns 150 shares of XYZ Corporation and the stock splits 3-2, how many additional shares will he own after the split?

Answer 7

75

Question 8

Mutual fund shareholder rights include all of the following except

Answer 8

Appointment of the investment adviser

Question 9

Which of the following signatures does FINRA require on a new account form?

Answer 9

A principal of the broker/dealer

Question 10

A shareholder owns 200 shares of stock with cumulative voting rights. If there are five vacancies being voted upon, what is the maximum number of votes the shareholder may cast for any one vacancy?

Answer 10

1,000

Question 11

A director of public corporation wishes to sell some of his stock in the company. Under SEC Rule 144, how long is the holding period?

Answer 11

6 months

Question 12

Which of the following is true regarding a private securities transaction?

Answer 12

It is a violation of conduct rules

Question 13

A treasury bond with a 10 1/4% coupon due on July 1, has interest payment dates of Jan. 1 and July 1. It is traded for settlement on Feb. 24. What is the number of days of accrued interest?

Answer 13

54

Question 14

This entity is entitled to purchase mutual fund shares from the underwriter or sponsor at a discount from the public offering price.

Answer 14

Dealer

Question 15

All of the following statements refer to European style options except

Answer 15

Can be exercised at any time

Question 16

US Treasury bills have all of the following features except

Answer 16

Sold in $10,000 increments

Question 17

Which of the following is not a risk factor in a limited partnership of a DPP?

Answer 17

Limited liability