Exam 13 Wrong Answers

Question 1

Which of the following is true of customer complaints received by an NYSE member?2

Answer 1

They must be maintained in a central file in the office where received

Both written and oral complaints must be maintained

Question 2

Which of the following statements correctly describe when a registered representative uses discretion?2

Answer 2

Number of shares

The growth stock

Question 3

An investor has $10,000 in his margin account. He wants to sell short as many shares of XYZ stock as possible. XYZ is trading at $4 per share. With Reg T at 50%, what is the maximum number of shares he can sell short with $10,000?

Answer 3

2,500

Question 4

Relative to a DMM “stopping stock” on the NYSE, it can be done if2

Answer 4

It is for a public order

The designated market maker is guaranteeing a price

Question 5

Which of the following have the highest monthly payment guaranteed by the government?

Answer 5

GMNA

Question 6

An analyst includes ABC’s 6% debenture in his newsletter. The analyst’s employer is currently underwriting an ABC stock offering. This is permissible

Answer 6

If the bonds are not convertible

Question 7

Which of the following describe developmental oil and gas drilling programs?2

Answer 7

Drilling takes place only in proven areas

Return potential is not as great as it is in exploratory drilling

Question 8

With a variable annuity, which of the following factors are not involved in determining the amount of an annuitant’s first annuity payment?

Answer 8

The number of annuity units

Question 9

ABC Equity Fund charges a 12b-1 fee. The fund’s Board of Directors must be made up of at least

Answer 9

51% unaffiliated directors

Question 10

When a customer effects a proceeds transaction, the Five Percent Policy states

Answer 10

The combined proceeds to the broker/dealer on the sale and purchase should not exceed the 5% guideline based on the inside ask on the buy side

Question 11

Where do municipals trade

Answer 11

OTC

Question 12

A customer wants to give her daughter all of the shares in her growth mutual fund. Since the initial purchase of the shares, the value of the shares has increased steadily over the life of the investment. When the shares are gifted, the daughter’s cost basis will be

Answer 12

The same cost basis that Rhonda had for the shares

Question 13

Mary Parker has a very large annual salary and is two years from retirement. She has an immediate need to shelter her income from taxes. Which of the following would best suit her objectives?

Answer 13

An oil and gas income program

Question 14

According to the Securities Act of 1933, when new securities are sold in an IPO of a company that qualifies for listing on the NYSE, the final prospectus is to be delivered

Answer 14

Within 25 days of the effective date

Question 15

In order to make sure that the trader received the best execution, the trader should seek the

Answer 15

NBBO

Question 16

Where can retail investors find information on municipal bond issuers?

Answer 16

EMMA

Question 17

Costs associated with variable annuities that are not included in the sales charge may include

Answer 17

All of the above

Question 18

An employee quits her job where she had a balance of $10,000 in her employer provided qualified plan. If she decides to move the balance to a traditional IRA through a direct transfer, how much will be transferred from one plan administrator to another and what is the tax consequence?

Answer 18

$10,000, no tax consequence

Question 19

A client wishes to open a portfolio margin account. What must be completed prior to opening the account?

Answer 19

Be approved by a designated ROP for uncovered option writing; and customer must receive a copy of an sign the risk disclosure document at the time of application or earlier

Question 20

Your client wrote 5 XYZ June 60 straddles at $8.25. What is the potential maximum gain and loss?

Answer 20

Maximum gain is $4,125 and maximum loss is unlimited

Question 21

Which of the following are characteristics of BABs?2

Answer 21

They may provide a federal subsidy to the issuer

They may provide a tax credit to the investor

Question 22

After the beneficiary of a Coverdell reaches 30 years of age, within how many days must the funds be withdrawn?

Answer 22

30 days

Question 23

What is the maximum potential loss when a client holds a long straddle on a common stock?

Answer 23

Premium paid

Question 24

Which of the following statements is not correct concerning an IRA?

Answer 24

Married individuals must contribute into one account for both spouses, up to a specified amount for each person

Question 25

Which of the following is a wash sale?

Answer 25

Selling a put or buying a call within 30 days of sale of stock

Question 26

The maximum penalty which can be imposed on a business entity for false or misleading information on any SEC report or application is

Answer 26

$2,500,000

Question 27

Which of the following decreases debit balances in margin accounts?

Answer 27

Interest received

Withdrawal of securities

Question 28

Which of the following is the most secure?

Answer 28

TAN

Question 29

Which of the following is the main difference between two mutual funds: Domestic Blur Chip A and Domestic Blue Chip B?

Answer 29

The method of computing sales charges

Question 30

FINRA bylaws which relate to a member firm’s dealings with the public are provided for in the

Answer 30

Conduct Rules