Exam 4 Wrong Answers Flashcards
Which of the following entities does not issue Eurodollar bonds?
US government
All of the following are duties of a transfer agent except
Holding customer’s securities for safekeeping
In government yield auction of US Treasury bills, which of the following orders will always be filled?
Noncompetitive bid
Which of the following would be quoted on a bond confirmation when an investor purchases a bond that has been advance refunded?
Yield to call
Which of the following is the most secure?
TAN
How often can an investor purchase the maximum number of option contracts?
5 business days
A customer bought 100 shares of XYZ at 48. Within 31 days she sold her shares at 41. She then, within 30 days, wrote an XYZ May 40 put. How can she avoid deferral of her tax loss?
Nothing. The loss will be deferred.
Jack owns a small manufacturing company in the Northeast. The company is publicly traded; however its capitalization is very small. Jack would like to expand his operations over the next 2 years. Which of the following types of offerings will best suit the manufacturing company’s needs?
A shelf offering
In order of liquidation, which of the following has a residual claim to the assets of the corporation?
Common shareholders
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
24 months
All of the following are components of the leading economic indicators as published by the Department of Commerce except
Index of industrial production
The Revdex is found in which publication?
Daily Bond Buyer
An investor has an adjusted basis of $20,000 in a direct participation program. During the year $12,000 in cash distributions is received, and the investor’s share of depletion is $6,000. What is the adjusted basis at the end of the year?
$2,000
Which of the following statements regarding commercial paper is false?
Registration is required by the SEC
The electronic system for reporting municipal bond trades in the OTC secondary market is
SHORT
The cash value of a variable life insurance company must be calculated
Monthly
A private securities transactions exists when a representative
Is selling away
Which of the following is not subject to the short swing profit rule?
An investor with a net worth in excess of $5,000,000 (exclusive of primary residence)
Which of the following is a coincident indicator?
Industrial production
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 represents the order in which market orders are filled?
Priority, precedence and parity
A technical analyst interprets a reverse head and shoulders formation to be
Reversal of a downtrend
Which of the following is not true concerning simplified arbitration?
A single arbitrator conducts a hearing and renders a decision
Which of the following accurately describes an ETN?
Principal at maturity is based on an index
Who of the following are restricted persons associated with an IPO?2
The father in law of a registered representative
A broker/dealer not involved in the syndicate
Under the wash sale rule, a loss on the sale of a security is deferred if, within a period beginning 30 days before the sale and ending 30 days after the sale, a customer effects which of the following transactions which remain unexercised involving that security?
Sells a put
The FINRA statute of limitations for arbitration claims is
6 years
A corporation has a $4 million profit. The corporation is in the 34% tax bracket. What is pre-dilutive EPS? Common stock: 1,000,000 shares ($10 par) = $10,000,000; 5% preferred: 50,000 shares ($100 par) = $5,000,000; 7% debentures: 5,000 bonds ($1,000 par convertible at $10) = $5,000,000
$2.16
If a bond investor wants to know the rate of return measuring the total performance on a bond held from purchase through maturity, the investor should calculate the
Yield to maturity
Which of these sequences accurately describes the flow of an order to purchase a stock on the NYSE in a margin account?4
Wire room (order department), P&S, margin department, cashiering
Which of the following is not affected by the declaration of a dividend?
Assets
According to MRSB rules, under which of the following conditions may a municipal dealer share in the losses of a customer’s account?
Under no circumstances
Sell one ABC May 45 call for 4.50. Sell one ABC May 45 put for 3. Assuming intrinsic value only, at what price is there a $500 profit?
42.50 and 47.50
Which of the following is not an exempt transaction?
An issue of 5-year Treasury notes
XYZ stock is trading at $1.25 per share. With Reg T at 50%, what is he required deposit to sell short 10,000 XYZ @ 1.25 per share?
$25,000
A customer places a buy limit order at $36.50. This means that the order
Is held in the specialist’s book
Which of the following is the highest yield when a bond is trading at a discount?
Yield-to-maturity
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
An engineering report would be used for which of the following?
Hospital revenue bond
