Exam 24 Wrong Answers

Question 1

Which of the following are characteristics of auction rate securities?2

Answer 1

They have regularly resetting interest rates

They are issued by corporations and municipalities

Question 2

Which of the following are true of the interbank market?2

Answer 2

Major users are banks and large multinational corporations

Foreign currencies are usually traded in blocks of $1,000,000 to $5,000,000

Question 3

If an individual is found in violation of SEC rules for bribing a foreign official, the Act of 1934 specifies a maximum penalty of

Answer 3

$100,000, imprisonment for 5 years or both

Question 4

Moody’s MIG rating would apply to which of the following?

Answer 4

Bond anticipation notes

Question 5

How often can an investor purchase the maximum number of option contracts?

Answer 5

5 business days

Question 6

Which of the following statements correctly summarizes that tax advantages of qualified retirement plans?

Answer 6

All of the above are correct

Question 7

Which of the following is the most secure?

Answer 7

TAN

Question 8

If a municipal firm makes a contribution to the county assessor in the community where their office was located, which of the following occurs?

Answer 8

The firm would be unable to enter into a negotiated underwriting with that municipality for 2 years

Question 9

In pricing a new issue, a municipal bond underwriter would most likely check

Answer 9

The 30-day visible supply

Question 10

Which of the following is the most widely used index for option contracts?

Answer 10

S&P 100

Question 11

XYZ stock is trading at $1.25 per share. With Reg T at 50%, what is the required deposit to sell short 10,000 XYZ @ $1.25 per share?

Answer 11

$25,000

Question 12

When a member is liable for its percentage of any unsold securities, the syndicate is a(n) 2

Answer 12

Eastern Syndicate

Undivided Syndicate

Question 13

The first level of appeal by a respondent to a decision by the Department of Enforcement would be to the

Answer 13

National Adjudicatory Council

Question 14

An engineering report would be used for which of the following?

Answer 14

Hospital revenue bond

Question 15

Which of the following would not issue overlapping debt?

Answer 15

State

Question 16

All of the following are considered separate customer accounts for the purpose of SIPC coverage except

Answer 16

An individual’s cash and margin accounts

Question 17

A large corporation places an order to purchase a block of its own stock. The order is placed with a floor broker who enters the order with a specialist. The order is taken off the floor and filled. The block order is

Answer 17

A specialist block

Question 18

A municipal workable indication is the same as a

Answer 18

Likely bid

Question 19

The Investment Company Act of 1940 states that a certain percentage of a mutual fund’s board of directors be affiliated with he fund. This minimum percentage of unaffiliated members must be at least

Answer 19

40%

Question 20

Sell ABC short 20 stop 20.50. The ticker tape shows 19, 20, 21, 20.50, 20.25. At what price was the trade executed?

Answer 20

21

Question 21

Under NYSE rules, the final approval to open a new account is given by the

Answer 21

Partner or principal

Question 22

The LRH Growth Fund has a net asset value (NAV) of $16.84 and a maximum offering price listed at $18.11. The sales charge for this fund is

Answer 22

7%

Question 23

Which of the following correctly describes a bond’s interest accrual period?

Answer 23

The last payment date up to but not including settlement date

Question 24

According to the Trust Indenture Act of 1939 a trust indenture is required

Answer 24

On corporate bonds

Question 25

In order to avoid the wash sale rule, the investor when selling a security should not

Answer 25

Purchase a call option on the security within 30 days prior to and after the sale

Question 26

With a systematic withdrawal plan, from what source are the first payments made?

Answer 26

Dividends

Question 27

Accrued interest on a new issue municipal bond is calculated from

Answer 27

Dated date to settlement date

Question 28

A customer purchases 100 shares of XYZ at 40 in a cash account. Four days later, he deposits $3,000 with a promise to deposit the remainder the next day. Three days later, no money has come in. What should the registered representative do?

Answer 28

Sell out enough to cover the remainder and freeze the account for 90 days

Question 29

Which of the following large block transactions appears on the exchange tape prior to execution on the exchange floor?

Answer 29

Special offer

Question 30

Which of the following preferred shares has the highest yield?

Answer 30

Callable