Exam 2 Wrong Answers Flashcards
The responsibilities of the investment adviser include all of the following except
Appointing the officers of the fund
The responsible of a broker/dealer’s cashiering department is all of the following except
Handling the execution of a customer’s orders
Which of the following statements is not true concerning a non qualified deferred compensation plan?
Any investments grow on a tax-free basis
A client invested $200,000 in a real estate limited partnership. The client’s K-1 form shows the following: Gross revenue:$300,000; Operating expenses: $200,000; interest on mortgage: $95,000; depreciation: $55,000 if your client is in the 28% tax bracket and has no passive income, how much tax loss may be declared?
$0
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?
2,500
What is the most common type of corporate bond issued?
Unsecured
XYZ stock has a market price of $62. Your client writes an XYZ Sept 60 call for $5. A month later, XYZ stock has a market price of $68 and your client makes a closing purchase of the XYZ Sept 60 call at $10. What is his gain or loss?
$500 loss
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
A dealer has an average cost of 6.50 on the inventory position of an OTC stock the firm is trading. The NASDAQ Level 1 quote for the stock is 5-5.50. According to the FINRA conduct rules, what price would be used when figuring the mark up to a prospective customer?
5.50
He FINRA bylaw category which defines the proper methods for handling securities violations and complaints is the
Code of Procedure
Which of the following is a debt instrument?
ELKs
A customer deposits $100,000 face value of Treasury securities trading at par into his margin account. How much money could the customer withdraw?
$95,000
A redeemable security is
A security with no secondary trading
Disintermediation is
Large scale movement from the short to the long end of the yield curve
Which of the following bonds has the most call risk?
4% corporate bond trading at a premium, callable at par
Atlanta has $100 million of existing debt and makes up 60% of Fulton County’s assessed valuation. Fulton County has $20 million of debt. What is Atlanta’s direct debt per capital (assuming a population of 2 million)?
$50
Which of the following is true of customer complaints received by an NYSE member?
They must be maintained in a central file in the home office
Both written and oral complaints must be maintained
The announcement that must be filed in connection with a Regulation D offering is
An offering memorandum
Which of the following is not required to meet the educational requirements for selling a CMO to a retail client?
Suitability requirements for buying CMOs
Which of the following are considered technical indicators?3
200 day moving average
Put/call ratio
Short interest
A customer’s margin account has available SMA of $1,000. How much would the customer have to deposit to purchase listed options with premiums totaling $4,000?
$3,000
A well-known seasoned issuer is issuing securities in an APO. To meet Act of 33’ disclosure requirements, the issuer may use a/an
Free-writing prospectus
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
A customer places an order to buy 100 ABC @ 35 stop, but not for more than 36. This is a
Buy stop limit order
