Exam 26 Wrong Answers Flashcards
The custodian of a fund is responsible for which of the following functions?2
Recording the fund’s physical assets
Distributing periodic reports
Interest earned on which of the following securities is subject to state and local taxes?
Federal National Mortgage Association Bonds
When a municipal securities dealer receives a written customer complaint concerning a transaction, which of the following must he or she do?
Make a record of the complaint and the action taken in response
Which of the following are true of REITs?3
They must distribute at least 90% of their earnings to qualify for special tax treatment
If they are publicly owned, they must be registered with the SEC
At least 75% of their gross income must be from real estate related activities
A municipal bond broker’s broker may do all of the following except
Underwrite particular market offerings
Which of the following is/are true with respect to the risk and liquidity of federal agency securities?2
They are actively traded and have good marketability
In time, the longer maturities fluctuate considerably in price
Buy stop orders are used for all the following reasons except
Take advantage of a technical breakout of a support level
The loan value of an option in a long margin account is
0%
US government Treasury bills are auctioned
Weekly
An investor writes a listed XYZ August 70 put option for 3.50 when XYZ is at 68.50. At expiration XYZ is at 67 and the shares are put to the investor. What is the cost basis of the stock for federal tax purposes?
$6,650
A Form 144 Notice of Offering is effective for
90 days
All of the following are considered money market instruments except
Newly issued Treasury notes
If a client sells short 100 shares of ABC Corporation at 50 and ABC Corporation is a listed security, Regulation T would require an initial deposit of
$2,500
A put may be sold in a cash account if the customer deposit is which of the following?
Cash equal to the aggregate exercise price of the option
A bank guarantee letter equal to the aggregate exercise price of the option
If an investor buys an ABC July 40 call and sells an ABC April 50 call, it is a
Diagonal spread
