Incorrect Exam Question

Question 1

Rights can be traded on…

Answer 1

Exchange OR OTC

Question 2

Most REITS are traded…

And

What happens if REITS don’t follow the 75%/90% rules

Answer 2

Publicly Traded

And

They are subject to double taxation

Question 3

Rights must be received on expiration day by…

Answer 3

The agent listed on the offering sheet

AKA “Transfer Agent”

Question 4

What do REITS not allow on depreciation that Real Estate Limited Partnerships do…

Answer 4

Write Offs

They “pass thorough” in Limited Partnerships

Question 5

REITS provide investors with (4)

Answer 5

Income
Diversification
Growth
Professional Management

Question 6

An investor on a fixed I like has 10,000 to invest. His investment objectives are safety of principle and capital appreciation. Which of the following would be the most suitable investment?

A) Common Stock in growth company
B) a convertible corporate bond, rated grade A or better
C) US savings bonds
D) Money Market Fund

Answer 6

Convertible corporate bond graded A or better…. B/C rated a or better means it is a high quality bond with little chance of defaulting. The convertible feature offers the investor the appreciation potential they seek because an increase in the underlying stock will cause the market value of the bond to also increase

Question 7

What would a company most likely issue to stabilize cash flow?

A) common stock
B) Bankers acceptance
C) Commercial paper
D) certificates of deposit

Answer 7

To stabilize cash flow a company would most likely issue commercial paper…which is an unsecured, short term corporate debt which has a max maturity of 270 days

Question 8

Selling dividend is?

Answer 8

When a RR (registered rep) recommends buying right before a dividend prohibited as market price will drop when paid out