Exam 7 Wrong Answers Flashcards
All of the following are features and requirements of the Living Needs Rider Except
Diagnosis must indicate that death is expected within 3 years
A newspaper advertisement lists only the name, address, and phone number for information on options. Which of the following is required?
Approval of the ROP
A customer writes 10 ABC April 40 puts at $4.75 when the market price of ABC is $42. What is the maximum possible gain for the investor?
$4,750
Qualified higher education expenses in a 529 plan include which of the following expenses for elementary and secondary public school?
$10,000 in tuition
Which of the following is not a qualified exemption to the IRA early distribution rule and will incur a penalty?
To purchase an investment property
Which needs the approval of a supervisory analyst?
Research report
The maximum fee a broker/dealer can charge for a roll up is
2%
A municipal securities dealer buys $500,000 of 6% revenue bonds at par. The dealer re-offers the bonds. Under MSRB rules, which two of the following would be considered bonds fide quotes under the circumstances described?2
5.8 less 1/2
101
A corporation uses the statutory voting method. The shareholder owns 200 shares and there are five vacancies up for re-election. What is the maximum number of votes the shareholder may cast for any one vacancy?
200
A client wishes to open a portfolio margin account. What must be completed prior to opening the account?
Be approved by a designated ROP for uncovered option writing; and customer must receive a copy of and sign the risk disclosure document at he time of application or earlier
According to FINRA Rules on Private Securities Transactions, an associated person entering into a series of private transactions without compensation must provide to the member firm all of the following except
A written notice on each transaction
A pre-refunded bond is sold on a
YTC basis
An employee making $20,000 a year contributes to an IRA for 2 years. The employer then begins a qualified plan. With regard to IRA contributions, the employee
May continue to make IRA contributions and deductions
If a mutual fund publishes investment performance charts, the information presented must include
Maximum sales charges
An investor’s mutual fund account is currently worth $48,000. The sales charge was 8 1/2%. If she withdraws 6% per year, her monthly payments will be
$240
An investor purchases a 10% interest in a limited partnership with a $100,000 cash deposit. Her share of nonrecourse debt is $300,000. The limited partnership is forced to liquidate with the proceeds of the liquidation covering only $1,000,000 of the $3,000,000 debt. What is the customer’s maximum potential loss?
$100,000
Your client is bearish on ABC Stock. Which of the following options spreads might you recommend?2
Buy 1 ABC July 55 call, sell 1 ABC July 50 call
Buy 1 ABC July 55 put, sell 1 ABC July 50 put
An investor holds 2 July 60 calls. If a 25% stock dividend is declared, the insurer investor will hold
2 July 48 calls with 125 shares each
An employee quits her job where she has a balance of $10,000 in her employer provided qualified plan. If she requests that the plan distribution is paid to her so that she can roll the proceeds into an IRA, how much will she receive from the plan administrator, and how long does she have to complete the tax free rollover?
$8,000, 60 days
Bob wrote one XYZ July 45 put for $4.50 and one XYZ July 40 call for $2 with the market price of XYZ at 41. XYZ appreciates to 43, and Bob makes closing purchases of the put for $2.50 and the call for 3.75. What is the gain or loss?
$25 gain
Which of the following is false regarding bond anticipation notes?
Notes are repaid from general tax collections and direct government obligations
A customer opens a margin account with a $20,000 purchase. If Reg T = 50% and the customer pays in full for the purchase, what is the SMA in the account?
$10,000
When considering an investment for an ERISA account, the primary consideration is
Potential risk
Regulation S addresses
Off-shore sales of restricted stock
Which of the following represents the inside market?2
Highest bid
Lowest offered
