Exam 32 Wrong Answers

Question 1

Which of the following does not price on the basis of par value alone?

Answer 1

Treasury bills

Question 2

Determine the value of one right when the stock is trading rights using the following formula

Answer 2

(Market price - subscription price)/(number of rights required to purchase 1 share + 1)

Question 3

Which of the following is an attribute of an investment in an oil and gas partnership program that is not associated with an investment in a real estate partnership program?

Answer 3

Depletion

Question 4

Your customer has just bought $10,000 worth of Kashmir Growth fund. The trade will settle on

Answer 4

The same day

Question 5

An investor in a UIT receive what as their evidence of ownership in the UIT?

Answer 5

Shares of beneficial interest

Question 6

All of the following take place during the cooling off period except

Answer 6

Stabilization of the issue

Question 7

A broker dealer that is acting as a selling group member in an initial public offering of corporate securities is paid

Answer 7

The selling concession

Question 8

The rules governing the issuing of corporate securities to the public are covered under which act?

Answer 8

Act of 1933

Question 9

When an investor has established a covered call position, to determine the break even you must

Answer 9

Subtract the call premium from the purchase price of the stock

Question 10

A small broker dealer who does not ha e a computerized system in place to review orders, has several discretionary options accounts. Which of the following statements is true?

Answer 10

The firm is required to specify a Registered Options Principal to review discretionary accounts and to approve and initial each discretionary order on the day entered

Question 11

Your customer is long 100 shares of XYZ at 55 and short 2 XYZ Mar 60 calls at 3. His maximum loss is

Answer 11

Unlimited

Question 12

Dale buys an XYZ Jan 50 call and writes an XYZ Jan 60 call, what kind of spread is this? When will he profit?

Answer 12

Debit spread

Profit if it widens

Question 13

An investor established the following:

Long 1 IBM Mar 70 call at 4
Short 1 IBM Mar 60 call @ 8

The maximum loss of the position is

Answer 13

The spread minus the net credit

10 - 4 = 6

Question 14

A bridge connecting two states would like to issue new bonds to be supported by the same toll revenue as the outstanding issue. The outstanding bonds have an open end covenant. Which of the following are true?

Answer 14

The bonds are subject to ensure that the facility can support the payments for both bond issues

Question 15

A municipal securities dealer who is analyzing the condition of the new issue market would be most influenced by which of the following?

Answer 15

The 30 day visible supply

Question 16

Which of the following is true when a new issue of municipal bonds is being sold?3

Answer 16

Pre sale orders have the highest priority

Member orders are usually smaller orders for individual accounts

The bonds may be sold as soon as the issue is awarded

Question 17

All of the following provide short term financing for a municipality except

Answer 17

Bankers acceptances

Question 18

Income from which of the following is most likely to subject a high income investor to the AMT (alternative minimum tax)?

Answer 18

Industrial revenue development bond

Question 19

An investor with a 2 year time horizon has $75,000 to invest. He is seeking semiannual Payment’s if interest income. Which of the following would you recommend?

Answer 19

Treasury note

Question 20

Joe Smith, a customer of XYZ broker dealer wishes to diversify his portfolio by investing in many different types of securities. Joe will have to sign a suitability statement before investing in all of the following except

Answer 20

An industrial development bond

Question 21

When a member files retail communications with FINRA what is required to be kept in an internal file at the firm?3

Answer 21

A copy of the communication with the date it was first used

The name of the principal who approved the communication

The date the principal approved the communication