Practice Exam 1 Flashcards
Which of the following statements best describes financial risk?
The risk that an issuer were will be unable to meet interest and principal payments on debt obligations
Real estate investment trusts REITS
Pay dividends and pass against through two investors but not losses
45 puts are trading at 2.5. The CMV is at 42.50. The May 45 put is??
Parity
CMV+P=SP=Parity
During a discussion with a customer about a potential investment opportunity involving securities standing alone all of the following would likely be permissible except
The registered wrap points out correctly that the maximum possible loss on this particular investment is probably smaller than the maximum possible gain
Which of the following is an SRO
FINRA
Members and nonmembers alike can look into a brokerage service and qualifications record by accessing which of the following services
Broker check
Common dividends may be
Declared increased reduced or suspended by the Board of Directors
These would cause a change in the net asset value of a neutral funds share
The fund pays a small dividend
The market value of the portfolio declines
Past due dividends on cumulative preferred shares
Accumulate on the company’s books until paid
Treasury bills pay
All Interest at maturity
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?
No waiting period
These all mature at par value
Treasury strips, receipts, bills, notes and bonds
A firm designated as self clearing can
Act in a back office capacity for an introducing firm
Clear and settled transactions executed by other firms
The regulation enacted by the SEC to protect the privacy of customer information is known as
Regulation S – P
To meet a regulation T margin call a customer would have how long?
Settlement +2 additional business days
And open and company may sell fractional shares true or false?
True
A closed end Company may not sell fractional shares true or false?
True
Secured debt is asset backed T or F?
True
Unsecured debt is not asset backed TorF?
T
Margin calls can be met with deposits of?
Cash or fully paid for marginable securities
Records relating to a currency transaction report must be retained for how long?
5 years
And investor would expect which type of preferred stock to pay the highest stated dividend rate?
Callable
“ these securities have not been approved or disapproved nor have any representation is been made about the accuracy or the adequacy of the information”
Mandated to be in the final prospectus by the SEC
What dollar limit is placed on damages if a suit is filed based on allegations of manipulative practices?
No dollar limit
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
Money market debt instruments typically have maturities of?
One year or less
In an LP is the partnership entity responsible for paying taxes on gains?
NO
ETFs are
Open end funds
Have operating costs and expenses that are lower than most mutual funds
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
A broker dealer that executes trades and settles transactions for another broker dealer is called?
Carrying firm
The flow of money between the United States and other countries is known as
The balance of payments
When I corporation issues a mortgage bond, the issues total value
Should be less than that of the real estate it is backed by
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
Economists call mild, short term contractions
Recessions
Shelf offerings are covered under which act?
The securities act of 1933
Promissory notes are a form of?
Commercial paper issued by corporations
With regard to the issuance of securities the securities act of 1933 provides criminal penalties for fraud true or false?
TRUE
A bond having a call feature
Can be redeemed before maturity at the issuers option
