Exam 14 Wrong Answers Flashcards
A client has 200 shares of common stock that have a current market value of $35 and 10 mortgage bonds at par value. Supposing the value of the stocks and bonds increased by 1/2 point, what would be the increase in the value of the holdings?
$150
All of the following statements about customer confirmations of principal transactions in municipal securities are true except
They must disclose any dealer markup
A 30-year term municipal issue has a mandatory early debt retirement provision for the final 10 years of its life. This type of retirement is commonly known as a/an
Sinking fund
All of the following are true about using US Treasury Bonds to cover debt security call options except
A market basket of US Treasury securities of adequate value is acceptable
An RR with a NYSE member firm cannot be engaged in any other business without the prior written consent of the
Employing broker/dealer
A Treasury note is quoted at 100.8. If a customer buys $8,000 par value at that price, what will be the principal dollar amount involved?
$8,020
Terms established by the Options Clearing Corporation include3
Contract size
Strike price
Expiration date
A customer makes a short against the box sale. The customers broker will mark the account to the market for all of the following purposes except
To reduce the customer’s tax liability
An investor purchases an ABC July 45 call for 4 when the stock is at 43. If the stock rises to 51 and the investor exercised the call, which of the following is true?
The investor owns the stick with a cost basis of $49 per share
TANs, RANs and BANs are
Short term municipal obligations
The value of a municipal security purchased at a premium above par is decreased during the security holding period. The accounting process by which this is accomplished is known as
Amortization
For which of the following situations will no adjustment be made to the terms of a listed put option?
Cash dividend
Deductions available in the first year of an oil and gas drilling partnership com primarily from
Intangible drilling costs
What is the percentage of equity in an account with a debit balance of $22,800, 200 GMF at 40, 300 GE at 50, and 500 GF at 30?
40%
A Form 144 Notice of Offering is effective for
90 days
During periods of high interest rates, issuers of municipal securities wishing to retire their debt would
Make a tender offer
Which of the following best describes the term good delivery?
The seller delivers a properly endorsed certificate with all legal items attached
Which of the following ratings are equivalent?
Baa (Moody’s); BBB (S&P)
Which of the following is true regarding enforcement decisions by FINRA?
Decisions may be appealed to the SEC
The spread on a municipal dollar bond with a market of 87 - 7/8 to 88 - 3/4 is/are which of the following?2
7/8 of a point
$8.75 per bond
A stop order to buy may be used for all of the following except
To take advantage of a break in the support level
At what price do bonds go out of the syndicate for member orders on a new municipal issue?
List less the takedown
Which two of the following should be done immediately after receiving notice of the death of a client?
Cancel all open orders for the client’s accounts
Mark the account deceased
A company announced a 35 cent dividend payable July 15 to stock of record on June 20. It also declared a 7% stock dividend payable July 15 to stockholders of record on June 14. A customer purchases 2,000 shares regular way on June 13. He should expect to receive a cash dividend of
35 cents per share on 2,000 shares
