Exam 3 Wrong Answers

Question 1

An account under the Uniform Gifts to Minors Act earned $8,500 in interest income from bonds. The minor is 13 years old. How is this interest income taxed?

Answer 1

A portion is taxed at the minor’s rate and a portion is taxed at the rate applied to trusts

Question 2

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 2

21

Question 3

Failing to respond to a regulatory request in a reasonable amount of time

Answer 3

Will be considered an additional violation

Question 4

The rate that the Federal Reserve Bank charges member banks for overnight loans to meet their reserve requirements is called the

Answer 4

Discount rate

Question 5

XYZ Corporation is planning an add on offering. XYZ currently has outstanding shares and is now raising additional capital to build a new manufacturing plant. The quiet period during which no research may be published on XYZ will last for how many days?

Answer 5

3 days after the effective date

Question 6

Which of the following is true about Treasury Bills?

Answer 6

They are issued in book entry form

Question 7

An investor anticipates interest rates will rise sharply over the next 2 years. In this scenario, which investment below would allow the investor to profit with the least amount of risk?

Answer 7

Treasury bills

Question 8

Which transaction can only be executed in a margin account?

Answer 8

Short sale of common stock

Question 9

Mrs. Johnson bought 200 shares of Intel at 18 in March. When she passed away in June, the market price of Intel was 21. What is the taxation to her daughter, who inherited the shares?

Answer 9

Her cost basis is 21 and the holding period is long term

Question 10

Which of the following is completed prior to the first margin trade?

Answer 10

Margin account agreement

Question 11

The current margin requirement under Regulation T of the Act of 1934 is

Answer 11

50%

Question 12

Eligible 1031 like kind exchanges include which of the following?

Answer 12

Apartment buildings

Question 13

The ex dividend date is

Answer 13

The first date on which the stock trades without the dividend

Question 14

A specialist elegies an order to buy XYZ 200 shares 20 stop 19. This means that

Answer 14

The order is triggered at or above 20 and filled at 19 or lower

Question 15

The Fed Funds rate is the interest rate that

Answer 15

One bank charges another for overnight borrowing

Question 16

How often must performance statistics in a mutual fund prospectuses be updated?

Answer 16

Every 12 months

Question 17

A redeemable security is

Answer 17

A security with no secondary trading

Question 18

According to FINRA rules on private securities transactions, an associated person entering into a series of private transactions without compensation must provide the member firm with all of the following except

Answer 18

A written notice on each transaction in a series

Question 19

Which of the following would ensure that the numbers of shares printed on the stock certificates are equal to the number of shares that are outstanding for the corporation?

Answer 19

Registrar

Question 20

All of the following are necessary requirements for a broker/dealer to hold a customer’s mail except

Answer 20

The name of an alternative person to receive important correspondence on behalf of the customer

Question 21

Which one of the following comparisons would not make sense when deciding between investing in one mutual fund or another?

Answer 21

Funds with different investment objectives

Question 22

All the following are considered self regulated organizations for the regulation of securities offerings and trading except

Answer 22

SEC

Question 23

In accordance with the Uniform Gifts to Minor’s Act, a donor may

Answer 23

Give an unlimited amount of cash

Question 24

Regulation T of the Securities Exchange Act of 1934 gave the power to establish margin requirements to

Answer 24

Federal Reserve Board

Question 25

Which of the following terms would be used to describe a pre offering solicitation under Reg A+?

Answer 25

Testing the waters

Question 26

Face amount certificates issue debt certificates that offer predetermined interest rates. The certificates may be purchased by either periodic installments or with a lump sum payment. These certificates have a maturity of at least

Answer 26

24 months