Exam 37 Wrong Answers Flashcards
Which of the following could be an open end fund?
RTC Balanced with NAV of $12.50 and NAV of $12.50
Which of the following bonds has the most call risk?
4% corporate bond trading at a premium, callable at par
Beta of 1 indicates coincidence with
Market index volatility
The MSRB was created by
The Securities Amendment Act of 1975
Your client wrote 5 XYZ June 60 straddles @ $8.25. What is the potential maximum gain and loss?
Maximum gain is $4,125 and Maximum loss is unlimited
Which of the following statements is not true concerning a non qualified deferred compensation plan?
Any investments grow on a tax free basis
Regulation S addresses
Off shore sales of restricted stock
In the sake of a new issue of municipal securities, MSRB disclosure requirements specify that a customer must be provided with a copy of the
Preliminary official statement
With regard to sales breakpoints, any schedule changes must be communicated to existing shareholders within what period of time?
Within 1 year
In a new margin account, your customer purchases 500 shares of XYZ at $40 per share and meets the Reg T requirement. Three days after the position is opened, XYZ closes at $44 per share. The stock subsequently declines to 38. In response to your client’s inquiry, you would report that the current equity and SMA are
$9,000 equity, 1,000 SMA
For stock dividends, which of the following dates is Not chosen by the board of directors?
Ex dividend date
A variable life insurance policy states all of the following except
Current and minimum guaranteed cash value
If a call holder chooses to exercise the call, the writer must
Sell 100 shares of the underlying security at the strike price
A client invested $200,000 in a real estate limited partnership. The client’s K-1 form shows the following: Gross revenue: $300,000; Operating expenses: $200,000; interest on mortgage $95,000; depreciation : $55,000. If your client is in the 28% tax bracket and has no passive income, how much of a tax loss may be declared?
$0
When a municipal securities broker/dealer disciplines an associated person, this incident must be reported to the appropriate SRO
If the fine exceeds $2,500
In order to open a new corporate margin account, all of the following are needed except
An affidavit of domicile
Which of the following is true about a stabilizing bid?
It must be disclosed in the prospectus
In closing a discretionary account trading in options, you would need the permission of which of the following?
Registered options principal
What type of annuity contract could act as a hedge against either inflation or deflation?
Combination annuity
Which bond has the greatest market risk?
6% 30 year callable rated Baa
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
Mortgage backed issues are considered to be safe instruments. Which statement is incorrect concerning these securities?
GNMA, FNMA AND FHLMC are fully backed by the federal government
In the analysis of a general obligation bond, an increase in which of the following is not considered a negative event?
Assessed valuation of property
Which one of the following parties to an option contract receives the premium and has the obligation to sell the underlying security at the strike price if the option is exercised?
Call writer
Which of the following transactions requires distribution of an offering circular to prospective investors?
Reg A+
Which of the following applies to put option contracts?
The put holder has the right to sell at the strike price
An investor is long 1 July 50 put. After writing 1 July 45 put, this position is 2
Debit spread
Vertical spread
A stock’s trading rage is 86-92. Which of the following statements are correct if the stock has been declining below 90?3
Breakout at 93
Breakout at 85
Support at 86
Which of the following best describes cash settlement?
The customer pays for the securities on trade date
Concerning the reporting of last sale price information for OTC stocks, which of the following is true?
Last sale price information is available on OTC transaction in the National Market System
An investor owns 100 shares of a mutual fund listed at 20.50-21.90. She has Class B shares that have a 3% CDSC. At what share price will her funds be redeemed if she sells them in the first year?
$19.89
The maximum penalty which can be imposed on a business entity for false or misleading information on any SEC report or application is
$2,500,000
Which of the following will be a violation of the Private Transactions Conduct Rule 3040?
An associated person offering securities that are not registered with the Commission
In a government yield auction of US Treasury bills, which of the following orders will always be filled?
Non competitive bid
