Pre tests 1-3

Question 1

certificate for a municipal security is considered mutilated if any of the following conditions can’t be determined

Answer 1

maturity date
certificate number
seal of issuer
* coupon payment date does not constitute mutilation

Question 2

dealer to dealer confirmations

Answer 2

yield cusip contra party name

Not customers name

Question 3

Offerings of discount bonds must be accompanied by a legend informing customers that

Answer 3

informing customers that discount bonds are subject to tax on the difference between discount price and par, and that the discount yields shown are gross yields-to-maturity

Question 4

According to the MSRB, a firm’s records may be retained electronically:

Answer 4

In addition to having the capability of reproducing physical copies of the electronic records, a firm must also maintain electronic duplicates (i.e., backup copies) in a separate location.

Question 5

Under CIP requirements, a broker-dealer must verify a person’s identit

Answer 5

Within a reasonable period

Question 6

The account records for a broker-dealer must reflect the following information for a retail custome

Answer 6

The customer’s name and residence or principal business address
Whether the customer is of legal age
A tax identification or Social Security number
The customer’s occupation
The name and address of the employer
Information that will be taken into consideration when making recommendations to the customer (i.e., financial background, tax status, and investment objectives)
The signature of the municipal securities representative who introduces the account to the firm and the signature of a municipal securities principal indicating acceptance of the account
Whether the customer is employed by another broker-dealer or municipal securities dealer
The customer’s signature, although usually obtained, is not required.

Question 7

A copy of the MSRB manual must be available in all departments, EXCEPT:

Answer 7

Underwriting, trading or sales of municipal securities
Financial advisory or consultant services for issuers
Research or investment advice with respect to municipal securities
Any other activities which involve communication, directly or indirectly, with public investors in municipal securities
* clearance wouldn’t have it.

Question 8

A broker’s broker is a broker-dealer that engages in transactions for the account of:

Answer 8

Another broker-dealer

Question 9

The underwriter of securities that are used to partially refund an outstanding issue is required to:

Answer 9

Apply for a CUSIP number on the new issue and on any refunded portions of the old issue

Question 10

censure and statutory denial

Answer 10

A censure doesn’t necessarily cause statuatory denial

Question 11

how does an smmp confirm it’s ability to judge investments

Answer 11

It may affirmatively indicate in writing or orally that it is exercising independent judgment in evaluating the recommendations of the dealer

Question 12

A syndicate manager is required to provide a summary statement showing which TWO pieces of information

Answer 12

The aggregate par value and prices of all securities sold by the syndicate
The identity of each person who submitted group orders that received an allocation

Question 13

bearer bond

signature delivery

Answer 13

A bearer bond does not require an endorsement (a signature) by the owner, but a registered bond would require one. (78021)

Question 14

A swaps advisor

Answer 14

Is a MAP

Question 15

Mail Addressed to a rep

Answer 15

The firm shall not permit municipal securities representatives to open mail, even if it is addressed to them. The firm may insist that personal correspondence, not be received at their firm

Question 16

opening account for employees

Answer 16

When opening an account for an employee of another municipal securities firm, the carrying firm must sent written notice of this fact prior to opening the account. This is true even if the employee is not an associated person

Question 17

If a control relationship exists with the MA

can they bid on a syndicate offering

Answer 17

no

If a control relationship exists they can’t bid on negotiated or competitive.

Question 18

correspondence retention

Answer 18

4 years

Question 19

A customer purchases securities from a municipal securities dealer. Payment for the purchase is to be made by a bookkeeping entry, transferring money from another account of this customer. The completion of the transaction occurs:

Answer 19

When the bookkeeping entry is made by the dealer

Question 20

are verbal grievances complaints

Answer 20

Under MSRB rules, only written grievances are considered complaints

Question 21

Advisory Relationship Agreement

Answer 21

Every financial advisory relationship must have a written agreement between the issuer and the dealer providing financial advisory services. The agreement must contain the compensation arrangement including provisions relating to the deposit of funds.

Question 22

529 plan rules OS

Answer 22

529 plans are considered primary offerings and an os must be delivered no later then settlement.

Question 23

A municipal securities salesperson who also trades for her own account must be registered as

Answer 23

“associated person.”

Question 24

The legal opinion for a municipal bond states

Answer 24

The bonds may be legally issued
Interest is exempt from federal income taxes
The bonds were properly advertised and awarded

Question 25

A client located in New Jersey has purchased a municipal fund security from a dealer located in New York. If the client is receiving periodic statements, which of the following statements describes the dealer’s disclosure obligations regarding the fees it receives from the issuer

Answer 25

The fee disclosure is required at least annually.

Question 26

The term order period means the period announced by the syndicate during which orders will be solicited for the purchase of municipal securities:

Answer 26

Held in syndicate

Question 27

The records of original entry must show

Answer 27

he name on the account, a description of the securities (including total par value), sales price, dollar price or yield, accrued interest, and trade date. Since the accrued interest on when issued securities is generally unknown at the time of the trade, it need not be included, but should be entered at the time it is received

Question 28

Intermediate values in the calculation of a bond price should be carried out to

Answer 28

ten decimal places. Immediately before printing the price on the confirmation, the MSRB requires the value to be truncated to three places, which means that only three digits to the right of the decimal place are retained,
truncated not rounded

Question 29

529 plan distributions

for private high schools

Answer 29

private high schools is an eligible expense for 529 plans, they’re limited to $10,000 annually

Question 30

If the requirements for a good delivery of municipal securities are not met due to a missing legal opinion, reclamation must be made within:

Answer 30

One business day