Practice Exam 1 Flashcards

1
Q

Which of the following statements best describes financial risk?

A

The risk that an issuer were will be unable to meet interest and principal payments on debt obligations

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2
Q

Real estate investment trusts REITS

A

Pay dividends and pass against through two investors but not losses

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3
Q

45 puts are trading at 2.5. The CMV is at 42.50. The May 45 put is??

A

Parity

CMV+P=SP=Parity

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4
Q

During a discussion with a customer about a potential investment opportunity involving securities standing alone all of the following would likely be permissible except

A

The registered wrap points out correctly that the maximum possible loss on this particular investment is probably smaller than the maximum possible gain

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5
Q

Which of the following is an SRO

A

FINRA

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6
Q

Members and nonmembers alike can look into a brokerage service and qualifications record by accessing which of the following services

A

Broker check

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7
Q

Common dividends may be

A

Declared increased reduced or suspended by the Board of Directors

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8
Q

These would cause a change in the net asset value of a neutral funds share

A

The fund pays a small dividend

The market value of the portfolio declines

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9
Q

Past due dividends on cumulative preferred shares

A

Accumulate on the company’s books until paid

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10
Q

Treasury bills pay

A

All Interest at maturity

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11
Q

A municipal securities dealer has just made a contribution to the mayors reelection campaign. How long must a firm wait before it can enter competitive bids on proposed bond issues by the city?

A

No waiting period

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12
Q

These all mature at par value

A

Treasury strips, receipts, bills, notes and bonds

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13
Q

A firm designated as self clearing can

A

Act in a back office capacity for an introducing firm

Clear and settled transactions executed by other firms

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14
Q

The regulation enacted by the SEC to protect the privacy of customer information is known as

A

Regulation S – P

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15
Q

To meet a regulation T margin call a customer would have how long?

A

Settlement +2 additional business days

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16
Q

And open and company may sell fractional shares true or false?

17
Q

A closed end Company may not sell fractional shares true or false?

18
Q

Secured debt is asset backed T or F?

19
Q

Unsecured debt is not asset backed TorF?

20
Q

Margin calls can be met with deposits of?

A

Cash or fully paid for marginable securities

21
Q

Records relating to a currency transaction report must be retained for how long?

22
Q

And investor would expect which type of preferred stock to pay the highest stated dividend rate?

23
Q

“ these securities have not been approved or disapproved nor have any representation is been made about the accuracy or the adequacy of the information”

A

Mandated to be in the final prospectus by the SEC

24
Q

What dollar limit is placed on damages if a suit is filed based on allegations of manipulative practices?

A

No dollar limit

25
For a new issue that qualifies for listing on an exchange, a prospectus must be provided to all purchasers for how many days after the effective date?
25
26
Money market debt instruments typically have maturities of?
One year or less
27
In an LP is the partnership entity responsible for paying taxes on gains?
NO
28
ETFs are
Open end funds Have operating costs and expenses that are lower than most mutual funds
29
Underwriters acting as principles and committing to purchase any unsold shares for the syndicate account would be best described as being engaged in
Firm commitment
30
A broker dealer that executes trades and settles transactions for another broker dealer is called?
Carrying firm
31
The flow of money between the United States and other countries is known as
The balance of payments
32
When I corporation issues a mortgage bond, the issues total value
Should be less than that of the real estate it is backed by
33
If a broker dealer firm wishes to become a FINRA member firm, it must make its application
To the FINRA district office where the applying firm has its home office
34
Economists call mild, short term contractions
Recessions
35
Shelf offerings are covered under which act?
The securities act of 1933
36
Promissory notes are a form of?
Commercial paper issued by corporations
37
With regard to the issuance of securities the securities act of 1933 provides criminal penalties for fraud true or false?
TRUE
38
A bond having a call feature
Can be redeemed before maturity at the issuers option