Exam 38 Wrong Answers Flashcards
A firm is acting in the capacity of a broker and receiving a commission. The firm is performing as
An agent
An 8.5% CMO yielding 9.55% does not have which of the following risks?
Refinance
All of the following are differences between qualified and non qualified retirement plans except
Taxation on accumulation
Which of the following transactions requires distribution of an offering circular to prospective investors?
Reg A+
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
XYZ Corporation Primary Distribution Total issue: 1,000,000 shares; Retained for sale by underwriters: 800,000 shares. Reserved for distribution to selling group 200,000 shares. Per share: Public Offering Price: $10.00; Manager’s fees and expenses: .10; Underwriter’s allowance: .70; selling concession: .50, proceeds to issuer 9.20. The underwriting spread is
$0.80
A customer has purchased $15,000 worth of XYZ Corporation over a period of time. Which of the following is true about his subsequent sale of $5,000 of XYZ stock?
The investor is allowed to specify which shares are being sold to minimize his capital gain
Which of the following applies to put option contracts?
The put holder has the right to sell at the strike price
Option orders are transmitted to the CBOE trading floor via
OSS
An investment company can perform certain activities only with approval of a majority of the shareholders. Which of the following is the board of directors allowed to do without a shareholder vote?
Appoint officers of the investment company
Which of the following are characteristics of auction rate securities?2
They have regularly resetting interest rates
They are issued by corporations and municipalities
What is the lowest price that a seller is willing so accept for a security from a customer?
Ask price
XYZ 25.25 + .25; bid 25, ask 25.12. If an investor wishes to purchase 1,000 shares of XYZ, excluding commission or markup, what price would be paid per share?
25.12
A very busy executive wants to diversify by investing in a variety of mutual funds, but doesn’t have time to research and choose the fund. Which of the following may be an appropriate investment for this investor?
A fund of funds
Under SIMPLE plans, employers must make a matching contribution of up to what percentage of the employee’s annual wages?
3%
A registered representative qualified to sell only municipal securities may solicit orders for which of the following?2
Sewer and water revenue bonds
General obligation bonds
Which of the following terms would be used to describe a pre offering solicitation under Reg A+?
Testing the waters
Which annuity provisions guarantees payments as long as the annuitant lives?
Mortality guarantee
Under Simple plans, the employer must contribute matching contributions of up to
3% of employee annual salary
A well known seasoned issuer is issuing securities in an APO. To meet Act of ‘33 disclosure requirements, the issuer may use a/an
Free-writing prospectus
Which of the following entities does not issue Eurodollar bonds?
US government
15c2-6 involves the sale of low priced non-listed equities. According to 15c2-6 which of the following is an experienced customer?2
A customer with an account opened and funded more than a year within the prior year
A customer who has done 3 penny stock trades with the same firm
A customer margin account has market value of $10,000, debit balance of $8,000 and SMA of $1,000. The margin call can be met with
$500 cash
An investor is long 100 shares XYZ and sells a call. The investor is
Conservative
A $200 million new issue is being underwritten by a syndicate. A “tombstone” ad has been placed in the Wall Street journal listing the manager of the syndicate and the syndicate’s members. The placing of the ad was required by the
None of the above
When a municipal securities broker/dealer receives ACATS from another dealer, it has 2
Three days to verify account positions
Four days to complete transfer of account positions
All of the following are agency issues backed by government guaranteed or insured mortgages except
SLMA
With variable annuity, which of the following factors are not involved in determining the amount of an annuitant’s first annuity payment?
The number of annuity units
A security is being offered on a When Issued basis. However before you place the trade, the When Issue notice is suspended. How should you explain this to your client, who is interest in buying the stock?
The suspension terminates the When Issued basis and now orders taken must be delivered on regular way settlement and delivery basis. The client can place the order at his convenience
Regular way settlement in a DVP/RVP account is
Up to 35 calendar days
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
On a discount bond, which of the following lists is correct from the lowest to highest yield?
Nominal yield,current yield, yield to maturity
Which of the following is shown at Nasdaq Level 2?4
Highest bid
Lowest bid
Highest offered
Lowest offered
