Exam 22 Wrong Answers Flashcards
A Treasury nite 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
In a margin account with no existing positions or money balance, a client bought 100 shares of XYZ at 35 and wrote a call for a premium of 3. How much cash must the client deposit?
$1,700
All of the following are considered money market instruments except
Newly issued Treasury notes
A dispute between members may be submitted to simplified arbitration when the dollar amount does not exceed
$50,000
Which of the following is a correct statement concerning regular call options long in a customer’s margin account?
They have no value for the purpose of computing the margin required
All of the following are generally true about commercial paper except
It is issued as interest-bearing paper
Which of the following are of the same class?2
1 WLL October 70 call and 1 WLL January 70 call
1 WLL October 70 put and 1 WLL January 70 put
Which of the following financial instruments would most likely be used by US firms to finance imports?
Bankers’ acceptances
While engaged in a distribution, a managing underwriter may do all of the following except
Solicit purchases through an updated research report
The document filed with the Secretary of State attesting to the formation of a limited partnership (DPP) is called the
Certificate of limited partnership
Which of the following is an advantage of limited participation in an oil and gas program?
Depletion allowance
Money to pay off general obligation debt can be derived from all of the following except
User fees
A municipal new issue in which the managers have been appointed by the issuer to purchase and market the bonds is best described as a/an
Negotiated sale
Debt service of a municipality is defined as the
Total of interest and principal payable by an issuer
All of the following are true concerning a red herring prospectus except
It may be accompanied by a research report
An over the counter (OTC) transaction may be executed by a broker/dealer for all of the following except
As an agent with proper disclosure of a fair and reasonable markup
In a customer’s properly margined short account, the credit balance is $20,000. What will interest be charged on?
Zero
All of the following statements about customer confirmations of principal transactions in municipal securities are true except
They must disclose any dealer markup
All of the following are functions of secondary market except
The purchase of new issue bonds
Which of the following will affect the holding period of a security held for less than 12 months?
Buy a put
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
Under NYSE Rules, when a long sale order is prepared, the registered representative must record which of the following?
Location of the security at the time of the sale
Which of the following would likely contain a rate covenant for a municipal bond issue?
Revenue bond indenture
NASDAQ Level III displays which of the following?2
Registered market maker’s quote and size
Trading volume for each issue
Prices of stocks traded in the over the counter (OTC) market are determined by buyers and sellers
Negotiating with a broker/dealer
Lagging economic indicators include all of the following except
ISM new order index
The primary purpose of the Trust Indenture Act of 1939 is to
Protect the interests of corporate bond holders by providing for the appointment of a trustee
All of the following would fall under the FINRA definitions of advertisements and sales literature except
A report to a firm’s customers notifying them of managerial personnel changes
All of the following statements about a trade in a municipal security are correct except
The trade date is the date used for calculating interest accumulation
Which of the following best describes an arbitrage transaction?
Sell short 100 XYZ common in New York and simultaneously buy 100 XYZ common in Chicago
An open end investment company fund that charges an 8 1/2% sales load for single payment plans must offer all of the following except
Conversion privileges
All of the following statements are true about FINRA’s 5% markup policy except
The markup policy applies to securities sold at a specific price and with a prospectus
TANs, RANs, and BANs are
Short term municipal obligations
