Exam 23 Wrong Answers

Question 1

A Form 144 Notice of Offering is effective for

Answer 1

90 days

Question 2

Capital structure includes 4

Answer 2

Bonds
Retained earnings or earned surplus
Capital surplus or paid in surplus
Common and preferred stock

Question 3

Lagging economic indicators include all of the following except

Answer 3

ISM new order index

Question 4

All of the following are considered money market instruments except

Answer 4

Newly issued Treasury notes

Question 5

Interest rate conditions which encourage the refunding of debt issues are

Answer 5

Falling rates

Question 6

How long is a Form 144 Notice of Sale effective?

Answer 6

90 days

Question 7

The custodian of a fund is responsible for which of the following functions?2

Answer 7

Recording the fund’s physical assets

Distributing periodic reports

Question 8

An additional $3,000 transaction in a general margin account requires a deposit of

Answer 8

$1,500

Question 9

An American manufacturer of office equipment has contracted to deliver $1,000,000 worth of equipment to a British corporation payable in British pounds. The American manufacturer could best protect itself from currency fluctuations by purchasing

Answer 9

Puts on British pounds

Question 10

A client with a restricted margin account sells $7,000 worth of securities and buys $5,000 worth of securities on the same day. Assuming no previous SMA balance and disregarding commissions, which of the following would describe the status of the account?

Answer 10

The customer can exercise his or her 50% guaranteed withdrawal privilege

Question 11

Which of the following is/are true with respect to the risk and liquidity of federal agency securities?2

Answer 11

They are actively traded and have good marketability

In time, the longer maturities fluctuate considerably in price

Question 12

When interest rates on short term securities are high and a registered representative directs investors to withdraw their funds from the short term debt instruments and invest in long term debt instruments the process is called

Answer 12

Disintermediation

Question 13

The sale of restricted securities by an officer of the issue would be in compliance with SEC Rule 144 if3

Answer 13

The securities are fully paid for

The officer has owned the securities for at least 6 months

The broker/dealer distributing the securities acts in an agency capacity

Question 14

According to MSRB rules, each of the following are considered advertisements except

Answer 14

Official statements