Exam Wrong Answers 1 Flashcards
Which of the following is exempt from FINRA Rule 5130, which prohibits the purchase of IPOs by member firms and associated persons?
An associated person whose limited registration permits selling only investment company products
If a customer purchases securities and does not settle the account in 4 business days, the brokerage firm’s first order of business is to
Cancel the trade and sell the purchased securities
All of the following are considered conflicts of interest for the general partner in a limited partnership except
Accepting $20,000 for a covenant not to compete with the limited partnership
With regard to variable life insurance policies, the largest expense for an insurance company associated with
Investment management
The purpose of a Rule 144 filing is to
Alert the SEC that a control person is offering securities for sale
A US government bond quoted at 94.20 - 95.08 has a bid price of
946.25
Which one of the following statements describes the market manipulation practice of painting the tape?
Buying and selling a security among traders to create a high level of activity to influence the price of a stock
Open market operations of the Federal Reserve Board cause direct changes in
M1
Which of the following is False regarding warrants?
Warrants are issued at a discount to the underlying equity in order to make security offerings more attractive to the investor
Where can retail investors find information in municipal bond issuers?
EMMA
A private securities transaction exists when a representative
Is selling away
An analyst includes ABC’s 6% debenture in his newsletter. The analyst’s employer is currently underwriting an ABC stock offering. This is permissible
If the bonds are not convertible
Which is true regarding UGMA/UTMA accounts?
The donor can be the custodian
FinCEN requires banks and broker/dealers to adhere to anti-money laundering (AML) rules, including
A designated independent party to test the procedures
A mutual fund prospectus can no longer be used if financial information is older than
16 months
The ABC European Bond Fund invests in the debt of European corporations and other companies doing business in Europe. Investors in this fund are subject to all of the following risks except
Liquidity risk
Which of the following instruments trades on a discount yield basis?
Treasury basis
Most stock options are settled which way?
Physically
A variable life policy’s nonforfeiture provision
Entitles the policyowner to the cash value less any outstanding loan amount if the policy is terminated
Maximum civil and criminal penalties for an individual for insider trading violations are
$5,000,000 and or 20 years imprisonment
In evaluating a limited partnership, which is the most important consideration?
Economic viability
Which of the following activities is an associated person who is not a registered representative permitted to perform?
Provide account opening forms to a new customer
Which of the following is a lagging indicator?
Average prime rate
Under Regulation T, if a customer’s account is frozen for 90 days, the customer may make
Purchases on a cash basis
