Exam 8 Wrong Answers Flashcards
Which of the following is completed prior to the first margin trade?
Margin account agreement
Stock rights are
Short term
A parent has been using distributions from a 529 plan to pay for her son’s college education. In his spare time and unrelated to his college curriculum, the son decides to start a business and needs $15,000 in seed money. If $15,000 is withdrawn from the 529 plan to cover this business venture, what are the implications?
10% penalty and ordinary income taxes on earnings
Companies are required to notify FINRA of corporate actions, such as dividends, stock splits or reverse stock splits and rights or subscription offerings within what time period?
10 days prior to record date
Which of the following facts concerning UGMA accounts is incorrect?
Securities are registered in the name of the minor
What is the lowest price at which the dealer will sell a stock to the investor?
Ask
What is the timeframe for filing relevant Suspicious Activity Reports?
Within 30 days of initial discovery
A CPA for XYZ Corp. knew in advance that XYZ would report a quarterly earnings loss. Based on this knowledge and prior to the release of the company’s quarterly earnings report, the CPA sold short a large block of XYZ stock which drove down the price of the stock. Another investor who had entered an order to sell XYZ at the market around the same time sold at a very low price due to CPA’s block trade. What legal recourse does the investor have against this CPA?
File a lawsuit for damages
An investor owns a security with a $10,000 face value that matures in 6 months and will pay interest only at maturity. The interest earned is not subject to state or local taxation. This investor owns a
Treasury bill
The term for active stock that represents the number of shares owned by the public is
Outstanding stock
Which of the following best describes a “workable indication” from a dealer?
An estimate
FinCEN requires banks and broker/dealers to adhere to anti-money laundering (AML) rules, including
A designated independent party to test the procedures
The partnership agreement is obtained when a broker/dealer opens an account for a partnership because
It names the individual authorized to trade for the partnership
Which of the following correctly describes a bond’s interest accrual period?
The last payment date us to but not including settlement date
An option contract that gives the holder of the contract the right to sell the underlying security at the strike price is a
Put option
