Exam 11 Wrong Answers Flashcards
Where can retail investors find information on municipal bond issuers?
EMMA
Option orders are transmitted to the CBOE trading floor via
OSS
Variable life policy premiums
Are paid in fixed amounts at specified intervals
Sandy holds 2 XYZ Dec 60 calls. XYZ split 3:2. After the split Sandy holds 2 XYZ Dec 40 calls. A week later, she sold her calls for $3. What is the total premium she received?
$900
When a firm effects trades for its own account, it is acting in principal capacity and is considered a(n)
Dealer
In the sale of a new issue of municipal securities, MRSB disclosure requirements specify that a customer must be provided with a copy of the
Preliminary official statement
Long term equity appreciation participation securities or LEAPS have expirations as long as
39 months
All of the following are components of the leading economic indicators as published by the Department of Commerce except
Index of industrial production
Which of the following is a wash sale?
Selling a put or buying a call within 30 days of sale of stock
Long 1,000 shares at 20, short 1,000 shares at 10. What is the minimum maintenance on these positions?
$10,000
Which of the following is true about a stabilizing bid?
It must be disclosed in the prospectus
Compute combined equity in this account. Long market value is $80,000; short market value is $6,000; Debit is $54,000; Credit is $10,000 and SMA is $10,000.
$30,000
With a systematic withdrawal plan, from what source are the first payments made?
Dividends
When a variable annuity is sold with a level load, the sales charge is deducted from
Each deposit made into the annuity contract
After the first annuity payment is calculated in a variable annuity, future payments are calculated
By multiplying the number of annuity units by the current redemption value of a unit
The Securities Exchange Act of 1934
Regulates exchanges and over the counter markets
Which of the following trades freely on an exchange or OTC?
Master limited partnership
An investor is interested in selling her shares of ABS Corp. which trades over the counter. The best bid price is $3.15 from the market maker Donaldson. The best ask price is $3.30 from the market maker Williamson Investments. The investor trades listed stocks on the NYSE through her broker/dealer, STAT Investments. She can sell her ABC Corp shares
By contacting her broker/dealer STAT Investments; she will get the bid price of $3.15
A client wants to discuss the assignment of his short call option on XYZ. The market price is $1.00 out of the money but the market price has been increasing steadily. He asks when he is required to deliver the stock. Which of the following is the correct means of option assignment for his call?
The Options Clearing Corporation decides which broker/dealer will deliver the securities. Then the broker/dealer will assign one of their clients by random selection. The client might not be assigned.
Which of the following best describes cash settlement?
The customer pays for the securities on trade date
Which of the following best fits the definition of investment adviser?
Publisher of reports used to promote particular securities
The highest price a buyer is willing to pay for a security is known as the
Bid price
Minimum margin on municipal bonds is determined by the
FINRA
A customer shorts one ABC Jan 65 call for a premium of 4 and holds one ABC 70 call for a premium of 1. What is the customer’s maximum potential loss?
$200
A customer receives a red herring from his registered representative and has indicated interest in the offering. Which two of the following are true?2
The customer is not obligated to buy the stock
The broker/dealer is not allowed to accept a deposit to secure the customer’s indication of interest
All of the following are true regarding indications of interest eclipsed by an underwriter of a new public offering during the 20 day cooling off period except 2
Indications cannot be canceled by the customer
Indications cannot be cancelled by the underwriting firm
Which of the following best describes the cross over point in limited partnership programs?
Cash flow and tax benefits have declined to equality with taxable income
