Kaplan Simulated Exam 5 Flashcards
The Municipal Securities Rulemaking Board (MSRB) is authorized to adopt rules concerning all of the following except
The information to be provided by municipal issuers
One of the most popular index options is the VIX. The VIX trades on
The Chicago Board Options Exchange (CBOE)
SEC Regulation FD is best described as a rule requiring disclosure by
An issuer of securities
A margin account with a short credit balance of $39,000 will receive a margin call if the SMV rises above
$30,000
An investor purchases a GFC Jan 40 call at 4 and sells a GFC April 30 call at 9. This is an example of
A diagonal spread
Mutual fund Class B shares assess
A deferred sales load
Which of the following municipal issues would least likely involve overlapping debt?
An airport district
In most cases, FINRA’s record keeping requirements follow SEC Rule 17a-4. One notable exception is records of written customer complaints where
FINRA requires four years and the SEC requires three years
Cash dividends from real estate investment trusts (REITs) are
Taxed as ordinary income
Which of the following covers a short call?2
Long stock
Stock rights
Which of the following statements are true?2 (about BABs)
Direct-payment BABs provide the municipal issuer with payments from the US Treasury
Tax credit or issuer BABs provide the municipal bond holder with a federal income tax credit
All of the following sources of revenue could be used to service general obligation debt except
User charges
In terms of the number of issues traded, the largest secondary market for securities is the over the counter market (OTC). Which of the following securities cannot be traded OTC?
Mutual funds
When recommending the purchase of a DPP to a client, as with all other investments, the recommendation must be suitable. FINRA adds some extras requirements in the case of DPPs. Among those is the requirement that the investor is
In a position to take full advantage of any tax benefits generated by the DPP.
A member firm May commingle the securities of two or more customers
With the customer’s written permission
One of the key requirements in offering a DPP to a customer is that the program must be suitable. FINRA has some specific suitability requirements for DPPs. Among those is the investor
Has a net worth sufficient to sustain the risks of the DPP, including loss of investment
For both US Treasury notes and Ginnie Maes
Quotes are as a percentage of par in 32nds
One of the effects of Regulation BI is to place a limitation on the use of the descriptive term
Financial advisor
Stabilizing bids may be entered at
A price no higher than the offering price
A customer of a member firm has just invested $100,000 into an equipment leasing DPP. Under FINRA rules, the maximum compensation allowable to the firm is
$10,000
A customer buys a 5% bond at par. The bond is callable in five years at par and matures in 10 years. Which of the following statements is true?
YTC is the same as YTM
All of the following are characteristics of 529 plans except
Donor income limits apply
If general interest rates increase, the interest income of an open end bond fund will do which of the following?
Increase
Which of the following transactions in the same security will affect the holding period of a security held for 12 months or less?2
Buy a put
Sell short
