Exam 25 Wrong Answers Flashcards
ERISA qualified pension plan fund managers’ fiduciary responsibilities regarding plan investments are determined by
Prudent Man rules in the state where the fund operates
A school teacher is retiring after 20 years of service. During the past 10 years, she invested $10,000 in a 403(b) through a payroll deduction offered by the school. Her account is now worth $16,000. What is her cost basis?
$0
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
The yield curves for high grade and low grade bonds are both positive and are moving further apart. An investment in which of the following would be most consistent with the economic expectations reflected in this relationship?
Government bonds
MSRB rules do not permit 2
Nominal quotes distributed as bids
Nominal quotes distributed as offers
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
A specialist block
Under FINRA rules, which of the following would be considered a Ranking Entity for the purpose of using investment company performance information in retail communications?
A mutual fund research company that provides general information to the public that is paid for by subscribers
If a call holder chooses to exercise the call, the writer must
Sell 100 shares of the underlying security at the strike price
A customer buys 1 Euro April 98 call and sells 1 Euro July 98 call. The position is profitable under all circumstances except
Premiums widen
Minimum margin on municipal bonds is determined by the
FINRA
One of your customers enters a limit order good for one month. Your firm has entered the order as a GTC order. The responsibility for canceling the order, if not executed by the end of that month is that of the
Firm
Which of the following could be an open end fund?
RTC Balanced with NAV of $12.50 and NAV of $12.50
When a stock is crossed on the NYSE floor and then appears on the tape after execution, the transaction is a
Exchange distribution
Which of the following are characteristics of TIPS?2
Fixed interest rate
Fluctuating principal
Your broker/dealer is a member of the underwriting syndicate and re offers 100,000 M of bank qualified municipal debt at 99.75 net. There’s a .75 point selling concession, .25 point re-allowance and 1 point additional takedown. What’s the member’s profit?
$1.75 million
A registered representative wants to increase his sales and decides to increase his option business. He sends a letter to all of his customers discussing covered call writing, but he makes no specific recommendations. When must the OCC Disclosure Statement be delivered?
At or prior to the time the client receives the letter
A customer has requested that an account be opened for trading options. Which of the following would the registered representative do in addition to mailing out the options agreement form?
Send an options disclosure document
If a mutual fund with an offering price of $30 does not offer breakpoints, rights of accumulation and dividend reinvestment at have to investors, what is the allowable maximum sales charge?
$1.88
To calculate taxes due on mutual fund shares being sold using the average cost basis for the shares, what must the investor account for?
The taxes paid on dividend and capital gain reinvestment made for additional shares
Which of the following orders are reduced by the specialist of the NYSE on the ex dividend date of a listed stock?2
Open buy limits
Open sell stops
Which of the following is not true of Section 1035 Policy Exchanges?
Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days
If a mutual fund publishes investment performance charts, the information presented must include
Maximum sales charges
Which of the following is a suitability concern regarding fund of funds?
High expense ratio
Which of the following large block transactions appears on the exchange tape prior to execution on the exchange floor?
Special offer
