Exam 15 Wrong Answers Flashcards
Which of the following is false regarding a Rule 147 offering?
100% of the proceeds must be invested in the state
A stock dividend affects which of the following?2
Shareholder’s equity
Net worth
Prior to completing a trade, a broker/dealer must have which of the following, according to MSRB rules?3
Registered representative signature
Principal signature
Customer financial status
Which of the following statements are true regarding income bonds?2
They do not pay semiannual interest
Hey may not return 100% of principal at maturity
Which of the following is not a secured bond?
Guaranteed bond
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
Upon termination of employment, an employee’s funds from a 457(b) plan
May be transferred into an IRA. Once transferred, the funds become subject to a 10% penalty for early withdrawal
CQS transactions involve all the following except
OTCBB
Which of the following would be considered short swing profits by the IRS?
A company insider profits on a stock trade after holding the stock for a 5 month period
All of the following are used to properly evaluate the yield to maturity of a bond investment except
Current price of the bond
An investor wants to purchase ABC stock, which is currently trading at $38 per share, because he believes it has excellent long term appreciation potential. Near term however, he expects the stock to decline in price due to general market weakness. If he wants to purchase the stock below it’s current market value and generate additional income, he could
Write a put at $35
Which of the following is false regarding bond anticipation notes?
Notes are repaid from general tax collections and direct government obligations
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
Which of the following needs voter approval?
GO
Which of the following is not true regarding a non qualified retirement plan?
It needs IRS approval
Which of the following is not an exempt transaction?
An issue of 5-year Treasury notes
In opening an options account, all of the following must be completed except
Eceiving a signed options agreement from the customer
A Third Market trade involves
Listed stocks traded over the counter
As an initial transaction in a margin account, you sell 100 shares of XYZ at 30. The market drops to 25. What is your equity?
$2,500
A beginning investor has limited funds, but wants immediate exposure to a variety of investment styles. The investor should consider which if the following funds?
Fund of funds
A customer with a short equity put option is assigned an exercise notice by his firm. How should he handle this?
He must accept the exercise notice and buy the underlying stock
With a systematic withdrawal plan, from what source are the first payments made?
Dividends
Jimmy had money invested in SkyHi Aggressive Growth Fund for the past calendar year and realized a substantial capital gain on the shares; however, Jimmy did not sell the shares during the year. Which of the following statements is True?
The capital gain is exported to Jimmy on a 1099 form
A $200 million new issue is being underwritten by a sYndicate. A “tombstone” ad has been placed in the Wall Street Journal listing the manager of the syndicate and the syndicate’s members. The placing of the ad was required by the
None of the above
Which of the following is an exploratory well?2
Well in an unproven area
Well is a primary site
All of the following are true of the voting rights of variable life policy owners except they
Have one vote for every share
No recourse debt is not usually added to a limited partner’s cost basis, except in the case of
Real estate
Buy one ABC Jan 40 call and write one ABC Jan 30 call. This position2
Is a Credit spread
Loses money if premiums widen
A limited partnership’s taxable income exceeds its cash flow. Which two of the following statements are correct?2
Limited partners will have phantom income
The limited partnership is experiencing the crossover point
A mutual fund is listed as $20.25-$21.41 - +.03. How much is the sales charge for this fund?
$1.16
Broker/Dealers (B/Ds) are held to higher disclosure standards with regard to penny stocks. What information must be disclosed to penny stock clients?
Inside bid and offer quotation, number of shares the quote is good for, and the dealer’s bid/offer if no inside bid/offer quotation is available
Which of the following have currency risk?2
American Depository Receipts
Eurobonds
According to MSRB rules, all of the following would be an advertisement except 3
Listings of offerings
Preliminary official statements
Final official statements
Which of the following are needed for the opening of a corporate margin account?3
New account form
Corporate charter
Corporate resolution
Minimum margin on municipal bonds is determined by the
FINRA
Who enforces MSRB rules on NYSE member firms?
FINRA
A customer bought 100 shares of XYZ at 48. Within 31 days she sold her shares at 42. She then within 30 days wrote an XYZ May 40 put. How can she avoid deferral of her tax loss?
Nothing. The loss will be deferred
