Fourth mock exam Flashcards
True or false: Agent must be licensed in state where client is domiciled
True
Bond prices are subject to ___ risk
Interest rate
Form 8-K must be filed __ days after the event
4
True of false: Participants in SEPs are vested after 1 year in the plan
False. Immediately vested.
Minimum face value of negotiable CD
$100,000
Warrants’ terms are generally ___ than rights’ terms
Longer
Parity price =
Current price / (Par / conversion price)
IPS
Investment policy statement
SPD
Summary plan description
BD whose primary business model is providing quotes for OTC stocks in which they position trade
Market maker
BD whose primary business model is providing quotes for exchange stocks in which they position trade
Specialist
Proponents of ___ assume small investors are usually wrong
Odd lot
Commodities have a positive correlation with ___
Unexpected inflation
Index options reduce ___ risk
Systematic
Asset based sales charge
12b-1 fees
Rate that is charged when a Fed Reserve bank borrows from another member bank
Federal funds rate
Rate charged with banks borrow directly from Federal Reserve
Discount rate
Nonmaterial changes on Form ADV must be noted on amendment filed within ___ days
90
Direct obligation of US government
Ginnie Maes
The lower the coupon on the bond, the ___ the price appreciation
Greater
Which can have ask price below NAV? Closed or open end fund
Closed-end fund
Which can trade at a premium or discount to NAV? Closed or open end fund
Closed-end fund
Insurance company issuing variable security bears __ risk
Mortality
Type of account that must be approved by a specially qualified supervisor
Options account
Guaranteed in variable life policy
Minimum death benefit
True or false: Variable life policy has guaranteed cash value
False
Policy loans are required after a variable life policy has been in effect for __ years
3
True or false: Earnings on a variable annuity are tax deferred
True
True or false: Variable life policy has guaranteed rate of return
False
Most risk for an investor
Short sale coupled with sale of a put
Primary difference between open and closed end investment companies is
Capitalization
Participation rate of 85% with cap of 11%
Can participate in 85% of gain but no more than 11%
Universal life policies let you adjust
Death benefit, premium, and cash value
Number of death benefit options in universal life policy
Two
True or false: Universal life policies may include a minimum guaranteed interest rate
True
