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Series 7 > Knopman Fact Sheet > Flashcards

Knopman Fact Sheet Flashcards

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Series 7 Top-off Exam flashcards
1
Q

Roth IRA- Single and Married (contribution is phased from…)

A

Single: contribution is phased from $110K - $125K
Married: Phased out from $173K-$183K

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2
Q

SIPC now covers up to xxx per separate customer, of which up to xxx can be in cash

A

$500K
$250K
Securities Investor Protection Corporation (mandates membership of most B/Ds)

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3
Q

Treasury securities, T bills, are entered in xxx form only

A

book entry - never receives actual paper (form of fully registered, ownership evidenced by computer entry, no physical bond issued, name and address recorded for purposes of receiving, all negotiable UST and gvt agency debt in this form)

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4
Q

Build America Bonds are

A

taxable muni bonds where the fed gvt subsidizes 35% of the int exp to bondholders (pay less interest)

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5
Q

Hypothecation

A

occurs when a customer pledges securities as collateral for a loan from a B/D

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6
Q

Rehypothecation

A

when a B/D then pledges those securities (from the customer that pledged the securities as collateral for a loan) to the bank for the funds that are loaned to the customer

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7
Q

In a tenants with rights of survivorship account (power of the successors to acquire property of the deceased),

A

one of the tenants can enter an order to trade, but any checks must be payable to both parties

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8
Q

Under Regulation NMS (National Market Systems), market maker cannot execute a trade in a unit smaller than

A

$.01 (33.9995) unless the stock trades for less than $1/share

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9
Q

Under Reg NMS, market maker cannot execute a limit order at a price

A

inferior to the best price available on the other side of hte mkt (ex: buy limit order is $34, buy limit must be executed at $34 or below)

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10
Q

Coverdell Educ Savings Accounts

A

can be transferred to a fam member of the beneficiary who is under age 30

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11
Q

Section 529 College Savings Plan

A

can be transferred to an yohter beneficiary once per yr

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12
Q

Reg NMS

A

is to promote efficient and fair price formation across securities markets by fostering competition among individual markets and among indiv orders

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13
Q

1035 exchange

A

an indiv exchanges 1 annuity (life insurance, endowment etc) for another without incurring any immediate tax liabilities

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14
Q

Trying to time the market is

A

associates w technical analysis

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15
Q

Overlapping debt (adjacent or coterminous)

A

only applies to general obligation bonds (issued by states/local gvt to raise funds for public works, backed by municipality), not revenue bonds (muni bonds that finance income producing projects, issued by any gvt agency or fund run like a biz, use private activity bond)

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16
Q

VIX (volatility index) is based on the

A

S&P500

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17
Q

A bearish investor would buy VIX xxx because

A

calls; volatility will generally increase as the market goes down

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18
Q

a stock dividend is or is not a taxable event

A

is not

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19
Q

P/S can be sold but is or is not redeemable w the issuer

A

is not

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20
Q

If the US econ is performing poorly, US exports are more or less attractive and US imports become cheaper or more expensive

A

more attractive; more expensive

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21
Q

an exchange of mutual funds within the same family of funds is or is not a taxable event

A

is

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22
Q

purpose of rule 144 is to

A

allow unregistered securities to be sold into the mkt, with SEC notification

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23
Q

warrants typically remain outstanding longer than

A

rights

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24
Q

GDP is quoted in

A

constant $ so 1 period can be compared to another

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25
Q

if a firm discloses FINRA membership on its website, it must

A

provide a link to the FINRA website

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26
Q

if a corporate insider purchases the company’s stock in the open market

A

shares are always subject to volume limitations of Rule 144, but are not subject to a holding period

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27
Q

if a corp insider receives company stock as compensation

A

shares must be held fully paid for 6 months and are subject to volume limitations of Rule 144 thereafter

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28
Q

if a non-insider wants to sell restricted stock, under rule 144

A

the shares can be freely sold after a 6 mth period

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29
Q

control persons (corporate insiders) are

A

officers, directors or 10% shareholders. They can invest in Reg D Private Placements and sell their securities subject to Rule 144

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30
Q

when an investor expects IR to increase

A

they would buy a yield based call option (good hedge for portfolio of LT bonds)

If bearish, buy put

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31
Q

T bonds would be affected more by a

A

change in rates than T notes or T bills

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32
Q

S&P 500 index is a xx indicator

A

leading

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33
Q

eurodollars are

A

US dollar denominated deposits, in a foreign location (pay attn to the 2nd part to see which currency it’s actually in)

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34
Q

if an investor wants to buy stock immediately to take advantage of an expected increase that’ll happen soon

A

investor should place a market order

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35
Q

Auction Rate Securities are issued by

A
  • are issued by municipalities or corporations
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36
Q

Auction Rate Securities are long or short term

A
  • are LT, variable rate bonds tied to ST IR
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37
Q

Auction Rate Securities have IR set through xx…clearing rate?

A
  • have IR reset through a Dutch auction process, at predetermined short term intervals (7, 28, 35 days). Lowest bid rate at which all shares can be sold at par = clearing rate
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38
Q

Auction Rate Securities have interest paid in

A

have interest paid in the current period based on the IR determined in the prior auction period

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39
Q

Auction Rate Securities trade at xxx and callable at xxx

A

trade at par (price doesn’t fluctuate, IR does) and are callable at par on any interest pymt date at the option of hte issuer

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40
Q

Auction Rate Securities are issued and rated as

A

are issued and rated as long term bonds (20-30 years) but priced and traded as ST instruments

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41
Q

Auction Rate Securities were typically of good/bad credit quality

A

good…not so recently

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42
Q

Auction Rate Securities will fail if

A

there are not enough bids received on the securities or when there are not enough bids below max rate established by the issuer

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43
Q

an U/W scale is a list

A

of all maturity dates and yields of a bond issuance

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44
Q

max duration of a shelf registration is

A

3 years

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45
Q

Deposit of a personal check does or does not require a registered rep to fill out a currency transaction report

A

does not

Only for all cash (cash and coin) trxn by a customer during 1 biz day that EXCEEDS $10k or smaller trxn in a single day that aggregate >$10K

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46
Q

Orders for durable goods is a xx indicator

A

leading

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47
Q

In a bull market, a security w a beta xx would outperform the market as a whole

A

> 1

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48
Q

Initial conditions of inflationary environment would be xx IR and xx of $

A

low IR (which then rises) and oversupply

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49
Q

Depletion applies to

A

O&G Limited Partnerships NOT Real Estate Limited Partnerships
(Depletion - depreciation deductions qualified for natural resources except raw land)

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50
Q

In a defensive market, xx is not a good sector for investment

A

manufacturing

defensive = resistant to recession - necessary services like utilities, tobacco, soft drinks, food/essentials

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51
Q

SEC regulates

A

SROs (Self Regulatory Organizations) Ex: MSRB - Municipal Securities Rulemaking Board or FINRA

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52
Q

Holding period for restricted stock:

  • 1st 6 m
  • 6m to 1 yr
  • > 1 yr
A
  • no resale
  • volume restriction on everyone
  • volume restriction only on insiders and affiliates
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53
Q

cost basis for a beneficiary who’s receiving securities from a deceased person’s estate is

A

the market value at the time of death (stepped up basis)

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54
Q

main purpose of an UW selling group

A

is to increase marketability

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55
Q

once an account has been inactive for 18 months, customer can be sent

A

quarterly statements

monthly for active accounts

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56
Q

a stop order, once triggered becomes a

A

market order

stop= once a specified price is reached or passed

  • buy when price rises to a stop price
  • sell when price falls to a stop price
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57
Q

SIPC only covers the

A

equity in a margin account (not market value or debit)

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58
Q

Rules 144 and 144A are part of the

A

Securities Act of 1933
Rule 144 - restricted stock: held for 6 mth, then volume restricted for everyone, >1 yr only vol restricted for insiders and affiliates; control stock has no holding period if bought in secondary
Rule 144A - exemption for purchase of restricted stock by qualified institution buyer (at least $100mm invested in securities of issuers not affiliated w entity)
- no 6 mth holding period, can sell to another qualified inst buyer

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59
Q

ADRs do or don’t have call risk

A

do not
American Depository Receipts - facilitate trading of foreign stocks in US (claims to foreign securities with shares being held by US banks abroad)
- priced in USD
- shareholders have divd rights, but wont’ receive preemptive rights
- still face FX risk (ADRs rep indirect ownership of foreign sec)

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60
Q

Banker acceptances facilitate

A

int’l trade

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61
Q

Funds that a bank has in excess of its reserves are

A

fed funds (can lend to those short on reserves, lend overnight to other banks and help them meet their Reserve Req Ratio, rate charged is the fed funds rate)

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62
Q

REITs invest primarily in

A

apartment complexes and shopping centers

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63
Q

Appropriate to open a new account for purposes of investing in a new issue?

A

No

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64
Q

if a registered rep sells shoes on the side, notify the employer?

A

employer must be notified and grant permission!

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65
Q

to open a numbered acct

A

customer would have to provide a written statement (that he owns acct) and prove identity

numbered acct (doesn’t need to show name, ex: Swiss banks)

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66
Q

subscription agreement accepts the LP as an investor in a

A

limited partnership

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67
Q

lowest to highest IR

discount rate, fed funds, broker’s call, prime rate

A

fed funds (interbanks), discount rate (set by Fed), broker’s call rate (IR which margin loans are quoted), prime rate (IR for most credit worth customers)

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68
Q

subscription agreement accepts the LP as an investor in a

A

limited partnership

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69
Q

lowest to highest IR

discount rate, fed funds, broker’s call, prime rate

A

fed funds (interbanks), discount rate (set by Fed), broker’s call rate (IR which margin loans are quoted), prime rate (IR for most credit worth customers)

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70
Q

if a customer purchases

A

100% of the market value

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71
Q

Eurodollars

A

are US dollars on deposit in foreign countries

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72
Q

if a T note is quoted 102.20 bid - 102.24 ask

A

spread is $1.25 bc difference is (4/32)% of par so .00125*1000=1.25

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73
Q

investor who sells a call and put (short straddle) and earns premiums of $8/sh will profit if

A

both options expire or if premiums are

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74
Q

if a T note is quoted 102.20 bid - 102.24 ask

A

spread is $1.25 bc difference is (4/32)% of par so .00125*1000=1.25

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75
Q

interbank market

A

where banks trade currencies (where FX rates are established; unregulated and decentralized)

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76
Q

Reg D private placement can have a max of xx non accredited investors

A

35 non accredited investors (accredited investors - fin inst like a bank, large tax exempt plan or priv biz dvp co or indiv who’s wore more than $1mm and net inc of at least $200K or $300 if married for last 2 years

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77
Q

interbank market

A

where banks trade currencies (where FX rates are established; unregulated and decentralized)

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78
Q

Reg D private placement can have a max of xx non accredited investors

A

35 non accredited investors (accredited investors - fin inst like a bank, large tax exempt plan or priv biz dvp co or indiv who’s wore more than $1mm and gross inc of at least $200K for last 2 years

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79
Q

Sallie Mae

A

securities loans from other educational lenders

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80
Q

To take advantage of a support level on a stock, investor would place either a

A

sell stop or sell stop limit order

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81
Q

Sallie Mae

A

securities loans from other educational lenders

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82
Q

investor who is certain of volatility on the upside OR downside buys a

if expect no volatility, create a

A

straddle (lots of volatility)

short straddle

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83
Q

elderly person who wants to save for 2 children’s education might invest in

A

T-bills

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84
Q

investor who is certain of volatility on the upside OR downside buys a

A

straddle (lots of volatility)

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85
Q

if spot rates for foreign currencies increase, premium on foreign curr puts

A

decrease

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86
Q

easiest process to detect money laundering conspiracy is

A

placement (bc first stage, place large amount sof $$ into legit fin system is easy to catch)

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87
Q

SMA can’t be used to pay down

A

debit balance (other way, debit will incr to reduce SMA)

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88
Q

Discretionary account - what’s not considered discretionary trade by RR (don’t need written order)

A

If rep only has to choose time and or place (customer chooses security, buy/sell, # of shares), it’s not discretionary

Discretionary if broker buys/sells without client’s consent

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89
Q

Discretionary account - what’s not considered discretionary trade by RR (don’t need written order)

A

If customer chooses security, buy/sell, # of shares, but leaves discretion on time and or price

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90
Q

Rule 144A applies to

A

QIBs

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91
Q

only earned inc can be contributed to

A

IRA

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92
Q

Property tax is not impt in

A

revenue bond analysis

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93
Q

Property tax is not impt in

A

revenue bond analysis

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94
Q

Increase inflation, Fed can

A

lower discount rate (think past recession, IR so low)

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95
Q

Increase inflation, Fed can

A

lower discount rate (think past recession, IR so low)

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96
Q

Upon opening a numbered account, customer must sign

A

form certifying ownership of the account and proves identity

numbered acct (doesn’t need to show name, ex: Swiss banks)

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97
Q

support level represents

A

bottom of a trading range (prevent further declines)

Resistance - opposite, prevent further rises

98
Q

If REIT passes through 90% of its gains to shareholders, doesn’t have to

A

pay taxes on amount it passes through

Taxable only to investors, can’t pass through operating losses

99
Q

Rights and warrants may trade as

A

independent securities in the secondary mkt

100
Q

Trading flat means

A

a security trades without accrued interest (t-bills, zeroes)

- no int pymts being made

101
Q

selling short into a tender offer

A

is not allowed

102
Q

a net rev pledge

A

pays expenses from gross revenue first, then subtracts debt service from net revenues

(for revenue bonds)

103
Q

Beta is

A

measure of a stock’s volatility in relation to overall mkt

104
Q

In a firm’s 1st year of operation, must pre-file

A

all advertisements w the FINRA at least 10 days prior to first use

105
Q

OCC Options Disclosure Doc must be received by a customer

A

before or upon account approval

106
Q

Currency Transaction Report is req for

A

cash deposits of > $10K on 1 biz day

Also applies when aggregate of multiple smaller trxn total >$10K

107
Q

Stock splits and stock dividends are or not taxable events

A

are not

cash dividends are taxable

108
Q

penny stock is a

A

non-Nasdaq equity security in the OTC market w a price of $5 or less

109
Q

a metric that a technical analyst is concerned with is

A

trading volume

looks at past price history and markets

110
Q

fundamental analyst would be concerned with

A

P/E ratio and historical earnings

focuses on indiv co and their industry groups: F/S, outlook for industry etc.

111
Q

customer sells short

A

$2K

it’s 100% in a long account

112
Q

Gross sales is found on

A

the I/S

113
Q

If customer already invested $23,500 in a mutual fund that has a breakpoint at $25K, then chooses to invest antoher $2K,

A

customer received the lower sales charge on the add’l $2K

bc of breakpoints - while mutual funds quoted at max sales charge %, sales charge lowers as deposit increases

114
Q

a canadian importer would buy xxx to hedge against an adverse currency mvmt

A

Put

adverse means canadian currency depreciates so USD stronger; want option to sell USD at higher price

115
Q

foreign exporter receiving pymt in USD buy calls in own currency to hedge

A

against an adverse currency mvmt

116
Q

amortization describes

A

process of adjusting cost basis of premium bonds (after bond purchased at premium, amortized ea yr or subtracted from cost basis to get down to par at maturity)

117
Q

syndicate manager choose

A

priority of orders

part of U/W syndicate

118
Q

priv placement, primary offering, secondary - which would have the least after-market activity

A

priv placement

119
Q

pension plan is a what plan

A

defined benefit

120
Q

mutual fund must redeem an investor’s shares within

A

7 days of request

121
Q

bond counsel validates

A

tax-exempt status and legal authority of the muni to issue bonds

122
Q

revenue bond least likely to be issued for a

A

high school (doesn’t gen rev)

123
Q

no appeal under

A

arbitration (settle disputes)

124
Q

what’s marginable: muni bonds, NYSE, options, AMEX listed, LEAPS

A

marginable: muni, NYSE, AMEX, LEAPs
NOT: options

125
Q

when investor sells mutual fund shares, sales is/is not taxed

A

is taxed, even if proceeds used to purchase other mutual fund shares in the same family of funds

126
Q

T bills and notes differ

A

T bills are 0 coupon, quoted in a discounted yield basis

T notes pay a semi annual coupon, quoted as a % of par in 1/32

127
Q

ERISA applies to

A

retirement plans in private sector only

128
Q

indiv w a corporate retirement plan that promises to pay 40% of their salary for 3 years after retirement is in a xxx plan

A

defined benefit plan

129
Q

IRA rollover can be done - how often

A

once a year

130
Q

no load fund

A

if customer purchases a mutual fund where NAV = purchase price (no sales charge)

131
Q

ad valorem tax is / not relevant when engaging in revenue bond analysis

A

not

it’s for real estate / property (GO bonds)

132
Q

monthly non-agricultural payrolls are xx indicator

A

coincident

133
Q

if inflation rate is 6.6%, Fed might sell US Gvt Sec to

A

reduce $$ supply

134
Q

Dow JOnes INdustrial Avg is narrowest or widest gauge of stock mkt

A

narrowest

135
Q

customer tells their register reps she wants to sell their securities only at $30 or above, the rep would place a

A

sell limit order at $30

136
Q

stock index options are exercised for

A

cash (no exchange of physical securities)

137
Q

if a bond is “held firm for 1 hour with a 5 min recall” it means

A

a rep has an hour to find a buyer for the security and is subject to a 5 min warning if during the hour, another B/D wants to place an order w that security

138
Q

If a specialist “stops stock” at a specific price

A

broker is guaranteed that price on an order but can look for a better price in the mkt

139
Q

best way to save for college w choice of trasferring beneficiaries is

A

Section 529 College Savings Plan

140
Q

When purchasing mutual funds,

A

investor can’t use positions in a diff family of funds to qualify for breakpoints

141
Q

when an investor purchases a bond at a discount and adjusts the cost basis toward par

A

referred to as accretion

142
Q

a deposit of cash, traveler’s check, or cashier check (money order) of $10K or more requires rep fill out a …

what’s not required

A

currency transaction report

personal check for $10K doesn’t req a CTR

143
Q

if in a joint account, a husband provides instructions to sell securities and cut a check in his name only,

A

rep can sell securities but would advise the husband that the check must be in both names

144
Q

the fourth market is where

A

institutions trade securities btwn ea other, w/o B/D

145
Q

selling short may be appropriate for an indiv who

A

already has a long position in the stock (shorting against the box and is used to defer a taxable gain)

146
Q

short sale would be appropriate for someone

A

with net worth of $10K

147
Q

Under FINRA Code of Arbitration

A

no appeal, all decisions are final and binding

148
Q

Under FINRA Code of Procedure, if a participant is not happy w a result, can

A

first appeal to the National Adjudicatory Council
(25 days to file)
Hearing Panel –> NAC –> SEC –> FED

149
Q

if a registered rep volunteers info on a proxy vote

A

rep may be required to register as a participant

150
Q

if a customer complains about excessive trading in an account

A

called churning

151
Q

when a B/D buys securities in order to sell them to a customer it is called

A

a riskless principal trxn (riskless and simultaneous trxn)

152
Q

in a riskless principal trade, broker must disclose

A

the commission to the customer

153
Q

new construction Limited Partnership offers

A

greatest depreciation opportunities, seek capital appreciation

154
Q

is a prospectus sales literature?

A

no

155
Q

any options sales literature must disclose that

A

options may not be suitable for all investors

156
Q

when trading options, opening purchase would be offset by

A

closing sale

157
Q

when trading options, opening sale would be offset by

A

closing purchase

158
Q

is raw land a depreciable asset

A

no

159
Q

exploratory program is or isn’t the riskiest O&G LP

A

is riskiest

160
Q

accrued interest is calculated

A

beginning on the dated date

161
Q

Under cumulative voting rights, investor can allocate their votes

A

any way they wish

162
Q

investor who expects stock to stay neutral should

A

sell a straddle

163
Q

stock that increases during a contraction is

A

countercyclical

164
Q

under gross revenue pledge, debt service is paid before xxx

A

before operations and maintenance

165
Q

OCC Options Disclosure Doc must be received by a cust

A

before or upon approval of account

166
Q

no options related material can be sent to customer unless

A

person received the OCC Options Disclosure Doc

167
Q

the BE of a covered call

A

is the mkt value of the long stock - premium

covered call is when you buy stock and sell call
covered put is when you short stock and sell put

168
Q

one of the objectives for writing a covered call is

A

earn income

169
Q

after tax yield on the bond

A

taxable yield * (1-TR)

170
Q

Fitch credit ratings are

A

same as S&P credit ratings

171
Q

mkt orders to buy are filled

mkt orders to sell are filled

A

at the lowest offer,

at the highest bid

(buy low sell high)

172
Q

mutual fund’s POP is based on the

A

specific sales charge an investor will pay based on their inv and BE schedule

POP = public offering price
Investor receives NAV

173
Q

If a RR puts the wrong account # on an order tix and the order is filled, RR can

A

bring situation to supervisor who can cancel and correct the tix

174
Q

Treasury Receipts are issued by xx and backed by xx

A

B/D ; US Gvt Sec

175
Q

If investor violates wash sale rule

A

investor not allowed to take loss on only the # of shares violated

you have to add the original difference to your cost basis and add to your holding period (you’re stuck)

176
Q

In an inflationary environ, xxx are all appropriate investments

A

TIPS, gold and real estate (value adjusted to inflation)

177
Q

Industrial Protection Index is a xx indicator

A

coincidental

178
Q

REITs are not xxx

Suitable for what individuals

A

not DPPs (nor an investment co)

Suitable for indiv who do not have a high net worth (bc taxed on inc pass through, and don’t want high TR)

179
Q

mutilated bond is never in xxx form unless validated by xxx

A

good delivery form, unless it’s validated by a trustee, registrar, transfer agent, paying agent or issuer of sec

180
Q

when indiv variable annuity is annuitized

A

accumulation units become annuity units; # of annuity units is fixed but value based on performance of separate account

181
Q

commissions are paid for

A

closed end funds not mutual funds or UITs

182
Q

married put is where

A

customers buys a stock and a put on same day

  • premium is part of the cost basis even if options expires
  • no taxable event until stock position is closed

also called protective put

183
Q

if option expires, gain or loss recognized

if option is exercised, premium becomes

A

in the mth of expiration

part of cost basis

184
Q

client wishes to transfer an account from 1 BD to another, fillls out

A

Automated Customer Acct Transfer

- has 1 biz day to verify the contents and 3 biz days to transfer and ship the securities

185
Q

dispute btwn 2 public indiv is not required to go to

A

arbitration

186
Q

the least risky O&G LP

A

is an income program

187
Q

Keynesian economics believe economy can be best controlled through

A

taxation and gvt spending

188
Q

Order of liquidation in a LP is

A 
Wages
Taxes
Secured Creditors
General Creditors
Suboridnated Creditors (Sub Debentures)
Pref Stock
Common Stock
189
Q

easy monetary policy is when FOMC

A

purchases securities to increase Money supply and spur econ g

190
Q

tight monetary policy is when FOMC

A

sells securities to decrease money supply and curb inflation

191
Q

when FOMC executes open mkt trxn, trades w

A

primary dealers

192
Q

bond is escrowed to maturity when…

A

when a muni deposits gvt sec in escro sufficient to cover the interest and principal pymt until maturity,

escrowed considered defeased or removed as a liability of the issuer

must be noted as such on the trade confirmation

193
Q

in a muni secondary joint acct, all participants must sell bonds at xx price

A

at same price

194
Q

treasury receipts do/don’t pay coupon

A

do not (zero coupon)

195
Q

if client of a RR moves to another state, the rep can

A

maintain the acct provided the rep is registered in the client’s new state of residence

196
Q

issuers are subject to blue sky laws w regard to

A

registration of securities

197
Q

in expansionary g, which inv are suitable

A

cyclical stocks: auto, tech

198
Q

B/D can / can’t work w ..

A

can’t work w public, participate in new issues, maintain inventory of sec, make a market

can work w other B/D

199
Q

if shares are sold in a margin acct, increases

A

SMA

200
Q

options are issued and guaranteed by the

A

OCC not SEC

201
Q

yield based options speculate

A

incrase or decrease in YTM

202
Q

DPPs pass through

A

passive gains/ losses to investors

203
Q

wife can/can’t trade in her spouse’s indiv acct

A

can’t w.o trading authority, even if have another joint acct together

204
Q

if given a breakpoint schedule and NAV, POP=

A

NAV/ (100%-sales charge)

205
Q

orders are req to be approved when?

A

promptly after execution by supervisor

206
Q

order tix must incl

trade conf incl

A

if order is discretinoary and if solicited/unsolicited

none of those

207
Q

for a muni bond to be good delivery w/o the legal opinion

A

must be marked ex-legal

208
Q

when a customer dies, open orders are

A

immediately canceled and acct is frozen

209
Q

minor’s account is taxed at the

A

parent’s rate until 18, minor’s rate reaching 18

210
Q

EPS calc

A

must subtract Preferred divd from earnings

211
Q

Given a change in IR, LT are xx than ST bonds and low coupon bonds are xx than high coupon bonds

volatile?

A

more

more

212
Q

FINRA and NYSE have criminal authority?

A

no, can censure a firm

213
Q

divd distrib from a mutual fund are taxable

A

at time they’re accrued even if they’re reinvested

214
Q

when a mutual fund pays a distrib, the NAV

A

decreases by the amt of the distrib

215
Q

cash divd received on stock are /aren’t taxed

A

are taxed, even if reinvested

216
Q

customer must sign the Options Agreement within

A

15 days of an account being approved

217
Q

if a RR doesn’t know the total income or net worth of client, rep

A

can’t recommend muni bond trxn

218
Q

if a customer executes a rollover of 401K, xx is held as tax

A

20%

can apply to recover the withholding tax as tax credit

219
Q

if indiv completes rollover and mixed funds w previous funds in IRA, proceeds are

A

ineligibel to be put back into a qualifed corp plan in future

  • need to maintain separate and distinct IRA
220
Q

when indiv inherits IRA where mandatory distrib begun, those distrib must

A

continnue, those they will be based on life expectancy of new owner

221
Q

add’l bonds test is issued by issuer to determine if

A

it has suff strength to issue add’l bonds, given it already has outstanding debt

222
Q

as expiration of option apporaches, time value

A

decays

223
Q

interest in a margin account is based on

A

broker call rate

224
Q

who determine if security is eligible for margin

A

Fed (NYSE, any Nasdaq are margineable)

  • options aren’t
225
Q

if us trade balance is negative, $ will

A

fall, increase value of int’l mutual funds

226
Q

.15q indicates

A

quarterly dividend of $.15/sh

227
Q

unregistered personel make cold calls thru any leads must

A

follow up by registered indiv

228
Q

minor account can only be a party to

A

UGMA or UTMA, minor can’t open indiv acct

229
Q

money mkt consists of

A

debt securities

230
Q

T-bonds w

A

money market fund

231
Q

P/S is an

A

equity security, not in money market

232
Q

interpositioning is

A

violation that occurs when firm places itself in btwn 2 clients

233
Q

when a registered rep recommends out of favor co that may be undervalued, what strategy

A

value portfolio mgmt strat

234
Q

3 phases of money laundering

A

placement, layering, integration

  • placement - easiest to catch, deposit illegal funds
  • layering - $ trasnferred thru complex fin trxn to separate funds
  • funds mixed w legit funds
235
Q

universable variable life ins policies can be sold by

A

indiv w insurance and sec license

236
Q

bonds that are insured must be delivered w

A

some proof of insurance, and diclose hte info on trade conf

237
Q

equity resarch analysts can’t

A

trade contrary to opinions, can trade consistent

238
Q

efficient mkt hypothesis

A

theorize that all info si full reflected in price of stock

239
Q

disputes regarding sex harrassment or discrim will only go to arbitration if

A

both parties agree, ohterwise to court

240
Q

correspondence

sales lit

A

emails sent to any # of exisiting cust or up to 24 prospective cust are considered; subject to spot checks

material sent to >25 prospective cust within 30 day, must be preapproved by principal

Series 7 (1 decks)

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