Exam Wrong Answers 1 Flashcards
With regard to a collect on delivery order, what is the proper procedure for the receiving firm should the funds not be available to pay for the securities at delivery?
He receiving firm must promptly return the securities to the selling firm
What is the meaning of the term strike price as used in an options contract?
The strike price is the value at which the option can be exercised throughout the option period
Equity options expire
At 11:59 pm ET on the third Friday of the month
A client places an order to sell stocks that are not in his account, stating he will deliver the securities. What must be discussed to meet the broker/dealer’s obligation in the trade?
Securities must be in good delivery status including a signature on the back for ease of transfer of ownership, not be physically damaged and meet the 100 share rule with the exact number of shares presented.
When a member offers an investment analysis tool to retail customers, it must make the investment analysis tool available to
FINRA within 10 business days of its first use by the public
ABC is a broker/dealer underwriting it’s own IPO. ABC is required to hire an independent underwriter to facilitate the IPO. What are the qualifications for the independent underwriter?
The underwriter must have done at least three offerings in the last 3 years. These three offerings must have been at least 50% of the size and type of ABC’s offering.
In a municipal offering, “group net” orders are treated by the manager
For the benefit of the syndicate as a whole
What is the lowest price that a seller is willing to accept for a security from a customer?
Ask price
ABC Corporation has issued a tender offer to the shareholders of XYZ Corp. Which of the following is a permissible way for a shareholder to sell into the offer?
Deliver one round lot of the stock
The difference between a stock’s actual return and its beta is
Alpha
For violations of the Securities Exchange Act of 1934 with respect to bribing a foreign official, which of the following are true?
An individual can be subject to a $100,000 fine, imprisonment for 5 years or both
A business entity can be subject to a $2,000,000 fine
Which of the following statements regarding overnight repurchase agreements is incorrect?
There is no interest rate risk
Which of the following preferred shares has the highest yield?
Callable
Which of the following corporate characteristics is the most difficult to avoid when structuring a direct participation program?
Centralized management
According to MRSB rules, all of the following would be an advertisement except3
Listings of offerings
Preliminary official statements
Final official statements
Which of the following is an exploratory well?
Well in an unproven area
Well is a primary site
A margin account has $11,000 market value and $4,500 debit balance. How much excess equity is in the account?
$1,000
Which of the following are characteristics of BABs?
They may provide federal subsidy to the issuer
They may provide a tax credit to the investor
Regarding a broker dealer retail sale to a customer, how can an order be filled?4
From inventory
Sell short to customer
Simultaneous or riskless transaction
As an agent
The SIPC (Securities Investor Protection Corporation) insures a customer’s account for unreturned securities for up to
$500,000
Which has the best rating?
Aaa 5 years to maturity
A broker goes to a designated market maker (DMM) to sell 100 XYZ. The DMM stops the broker at 31. Which of the following is true?
The DMM has guaranteed the broker a price of 31
Which of the following statements regarding commercial paper is false?
Registration is required by the SEC
A man is 52 years old. He is terminating his employment at a state university. He is fully vested in a 457(b) plan. If he withdraws the money from his 457(b) plan,
He must pay income tax
