Exam 5 Wrong Answers

Question 1

Which of the following is the largest equity derivatives clearing organization worldwide?

Answer 1

OCC

Question 2

FINRA administers the continuing education (CE) program for the securities industry, which consists of two mandatory programs: the Regulatory Element and the Firm Element. All registered individuals must satisfy the Regulatory Element

Answer 2

Within 120 days of their second anniversary and every 3 years thereafter

Question 3

Which of the following is true of REITs?

Answer 3

If they are publicly owned, they must be registered with the SEC

Question 4

The ex dividend date for a mutual fund is

Answer 4

The day after the record date

Question 5

Which one of the following statements is correct regarding jurisdiction and authority of SROs and broker/dealers?

Answer 5

Broker/dealers must join an SRO in order to charge commissions and markups

Question 6

If a stock is purchased just before the ex dividend date, the investor

Answer 6

Will have an unrealized loss on the stock

Question 7

When two corporations agree to merge, what is the outcome?

Answer 7

The stocks of both corporations are surrendered

Question 8

Payment of debt service for moral obligation bonds is typically dependent on

Answer 8

Legislative appropriation

Question 9

All of the following would be considered to be retail communications except

Answer 9

10 different emails sent to 10 different retail customers

Question 10

A registered representative may borrow money from a client

Answer 10

If the client is a member of the registered person’s immediate family

Question 11

If a municipal firm makes a contribution to the county assessor in the community where their office is located, which of the following occurs?

Answer 11

The firm would be unable to enter into a negotiated underwriting with that municipality for 2 years

Question 12

Which of the following gifts or gratuities given to a customer would be classified as a rule violation?

Answer 12

A gift with intrinsic value of $125

Question 13

A registered representative uses discretion if he chooses which of the following?

Answer 13

Number of shares

Question 14

Which of the following should be done immediately after receiving notice of the death of a client?

Answer 14

Cancel all open orders for the client’s accounts

Question 15

Which of the following is true of shares of a closed end investment company?

Answer 15

The shares have no redemption price

Question 16

According to the Investment Company Act of 1940, the term management company applies to all of the following except

Answer 16

Unit investment trusts

Question 17

All of the following regarding preferred stock dividends are correct except

Answer 17

Like common stock dividends, the dividend may change

Question 18

Upon filing a registration statement with the SEC, at what point would the issuer be required to provide additional information?

Answer 18

In response to an SEC deficiency letter

Question 19

IRS rules require that a limited partnership (LP) should be established with

Answer 19

Profit motive and economic viability

Question 20

NASAA members do all of the following except

Answer 20

Participate in enforcement actions only in their state

Question 21

What is the security for senior subordinated debentures?

Answer 21

General assets

Question 22

Asset allocation involves which of the following?

Answer 22

Investing in asset classes that are not correlated in terms of performance