Exam 5 Wrong Answers Flashcards
If interest rates are falling, which statement is true?
Premium bonds will appreciate faster than discount bonds
A customer’s margin account has available SMA of $1,000. How much would the customer have to deposit to purchase listed options with premiums totaling $4,000?
$3,000
Which of the following is/are characteristics of the interbank system?
Not regulated
When a member is liable for its percentage of any unsold securities, the syndicate is a(n)2
Eastern syndicate
Undivided syndicate
Under MRSB uniform practice rules, regular way settlement on municipal bonds is
Three business days following trade date
A municipal broker/dealer enters a bid wanted. This is a
Non binding request for a likely bid
A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from terminal illness or injury is called
Accelerated benefit provision
What is the major difference between oil and gas limited partnership and a real estate limited partnership?
IDCs
Regarding underwriting compensation, rank the following in order of size from greatest to least.3
Spread, concessions, reallowance
Under a Regulation S offering, when can securities be resold to the investors in the United States?2
1 year for equity securities
40 days for debt securities
Which of the following is a lagging indicator?
Average prime rate
In a margin account, market value is $11,000 and debit is $5,000. What is the buying power in this account?
$1,000
What method of calculating the cost basis of mutual fund shares sold requires recording each share transaction and accounting for individual shares sold?
Share Identification method
Which of the following corporate bonds is considered safest for an investor?
AAA-rated unsecured bonds
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
An investor buys bonds which are priced in basis points. These bonds are
Serial bonds
A customer writes 10 ABC 40 puts at $4.75 when the market price of ABC is $42. What is the maximum possible gain for the investor?
$4,750
Which of the following is not true concerning a redemption fee?
It is a form of sales charge
Accrued interest on a new issue municipal bond is calculated from
Dated date to settlement date
Which of the following documentation is required to open a corporate account?
Corporate charter and the corporate resolution
Which measures a corporation’s solvency?
Working capital
What is an underwriter’s maximum sales compensation, including wholesaling costs, in a DPP offering?
10%
The G.O. index contains
20 GO bonds with 20 year maturities
Which of the following are powers of the SEC?2
Write laws
Revoke registrations
T invests into his variable annuity on a periodic payment plan. If T wishes to annuities the contract and start receiving monthly payments now, which of the following is True?
T must stop investing before he can annuities the contract and start receiving monthly payments
Shares of stock that have actually been sold to the public are known as
Issued stock
Which of the following are true of negotiable certificates of deposit?2
The issuing bank guarantees the instrument
They can be traded in the secondary market
The expense limitation clause of a life insurance policy
Requires the insurance company to pay administrative expenses above the maximum charges stated in the policy
What are the two types of voting processes used by corporations?
Statutory and cumulative
The market value is $12,000. The debit balance is $5,500. What is your buying power?
$1,000
A retired investor is reinvesting the proceeds from a mature municipal bond. Which of the following would best suit her objectives?
A pre-refunded bond
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
The method by which a mutual fund offering price will be determined is
Outlined in the prospectus
In which qualified retirement plan may both the employer and employee contribute to an employee trust?
401k
The announcement that must be filed in connection with a Regulation D offering is
An offering memorandum
