Second Mock Exam Flashcards
True or false: Bankruptcy is cause for denial of BD registration
False
Crimes that are cause for BD registration denial
Convicted of a securities related misdemeanor or any felony in past 10 years
True or false: Using initials RIA is prohibited
True
True or false: Unit investment trusts have fixed interest rates
True
Two most common forms of discounted cash flow used in valuation of common stock
Dividend discount model and dividend growth model
Beta is a measure of
A stock’s volatility relative to the overall market
Offers a security for sale
Prospectus
True or false: Stock dividend distributed to current shareholders consistitutes an offer
False
Buy a put when you want to…
Limit the potential downside risk once you’ve bought a stock
How often an open-ended investment company must compute its NAV
No less frequently than once a day
When discretionary authorization must be received by BD
Before exercising discretion
When margin account agreement must be received
Promptly after first trade in the account
When discretionary authorization must be received by IA
Within 10 days after initial discretionary trade
When an options account agreement must be received
Within 15 days after the customer’s account has been approved
Private placements are exempt if they are offered to not more than ___ general public investors
10
True or false: Transactions involving issuers and underwriters are exempt
True
Sale of preorganization certificates is exempt if
There is no payment/commission and no more than 10 subscribers. Number of offers is unlimited.
POD account
Totten trust
Working capital formula
Current assets - current liabilities
To be required to file a Form 13F,
An institutional manager must have discretion over a portfolio of at least $100 million 13(f) securities
Hedge funds are organized as
Partnerships
To avoid tax liability, you can do this with an early qualified pension plan withdrawal.
Roll over the funds into an IRA within 60 days (ie another qualified plan)
Number of days agent has to appeal disciplinary findings
60
Section 404(c) of ERISA
Plan must offer at least 3 different investment choices
Need to calculate discounted xash flow estimation of the value of a bond
Discount rate, future cash flow, number of interest payments. Parity price is only relevant to convertible bonds.
Characteristic specific to universal life insurance
Policy may be overfunded
To be eligible to cast a vote as a stockholder,
Ownership must be established by record date
Price earnings ratio is used by technical or fundamental analysts?
Fundamental
Plan where you can withdraw funds before 59.5 with no 10% penalty
457
Requires publicly traded corps to issue annual reports
Securities Exchange Act of 1934
When an IA must register with SEC
Reasonably believes will have AUM of at least $100 million within first 120 days of registering
Buying an inverse ETF that tracks S&P 500 at a time when the market outlook is ___ would be appropriate
Bearish
Common use of stop order
To protect profit in long position and prevent loss in short position
Educational seminar for seniors held at upscale location
Free lunch
No active secondary market
Forwards
True or false: Unaffiliated solicitor must be registered as an IA
False
Capital needs analysis
Help determine proper amount of life insurance that will provide for family’s needs
Government should spend money to move economy into expansion
Keynesian
Maturity on US Treasury note
2-10 years
Asset classes
Equity, debt, cash, real estate, commodities
True or false: business continuity plan is partially based on firm’s annual net income
False
