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Practice Test Questions > Simulated Final Exam Questions > Flashcards

Simulated Final Exam Questions Flashcards

1
Q

Are non-accredited investors permitted to purchase a private placement?

A

They’re not always allowed to purchase a private placement. Only up to 10 non-credited investors in a 12-month period are allowed to purchase a private placement

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2
Q

The registration of a broker dealer in a state will automatically constitute the registration of an agent if the person is a what?

A

Partner, director, officer or other person’s occupying similar status

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3
Q

Who establishes rules and membership requirements for finra?

A

Board of governors

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4
Q

Which investments are exempt from the anti-fraud provisions of the uniform securities act?

A

Non security investments

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5
Q

Under registration by coordination, do the state and federal registration statements have to be filed at the same time?

A

No

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6
Q

Registration by coordination may not be used if…?

A

The federal registration statement has already been declared effective

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7
Q

What are features of arbitration?

A

Binding results, agreement among parties as to forum and 30 days to pay

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8
Q

Sarah is an IAR properly registered in state A and working for federally registered investment advisor. Twice a month Sarah meets with clients and state B at the federal covered advisor’s office. What is true about Sarah’s registration requirements?

A

Because she has a place of business in state B she must register there.

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9
Q

If finra finds that a member has violated the rules regarding Fair advertising, finra may require the member to file the proposed ads how many days prior to its first use?

A

10

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10
Q

The amount of the bond that a broker dealer is required to post is determined by who?

A

The administrator

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11
Q

The strategy of diversification is used to combat which risk?

A

Non-systematic

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12
Q

What is a means of financing foreign trade?

A

Bankers acceptance

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13
Q

Maximum duration of a right is how many days?

A

45

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14
Q

In order for an investor to be suitable to purchase a CMO they should be least concerned with what?

A

Liquidity

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15
Q

An advantage of variable annuities over mutual funds would be?

A

The investor receives tax advantages

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16
Q

The holder of an ADR has the same rights as a regular stockholder except for what?

A

Preemptive rights

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17
Q

What would require the approval of stockholders pursuant to SEC rule 145?

A

A company exchanges its shares for all shares of another company AND a company offers its shares in exchange for the assets of another company

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18
Q

An annuitant is interested in the largest monthly payment from her annuity now that she has retired. Which payout option will give her the greatest monthly payment?

A

Life only / straight life

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19
Q

A fixed annuity guarantees what?

A

Income for life, rate of return, protection from investment risk

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20
Q

He assumed interest rate will affect what?

A

The amount of the annuity payment and the value of the annuity unit

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21
Q

An investor May roll over their ira once a year and has how many days to get the money into a qualified account?

A

60 days

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22
Q

One of your clients inquires about the composition of the Dow Jones industrial average. You would respond that it is which type of index?

A

Large cap

23
Q

A financial planner works as an independent contractor in the capacity of a registered representative for a broker dealer. The broker dealer does not supervise his advisory activities but is aware that he is charging an hourly fee to construct a financial plan. According to the investment advisors act of 1940 what is true?

A

The financial planner is considered an investment advisor since the broker dealer is not supervising his financial planning accounts

24
Q

As for annuity contracts, what’s the withdrawal difference between lump sum, random withdrawals and annuitized contracts?

A

Lump sum and random withdrawals may be taxed and an extra 10%, if the annuitant is less than 59 and a half years old. BUT annuitized contracts of investors who are less than 59 and a half years old are not subject to 10% tax penalty nor are withdrawals due to death or disability

25
Q

Increase in the PPI would be best described as?

A

Cost push inflation

26
Q

Does commercial paper have to be sold to money market funds to be exempt from registration?

A

No

27
Q

What is a benefit of investing in mutual funds?

A

The NAV of mutual funds is often insured by government agencies

28
Q

Both the week and the semi-strong views of the efficient market hypothesis believes what?

A

That unknown inside information is not reflected in asset prices and could be used to earn a profit

29
Q

The weak view of the efficient market hypothesis believes what?

A

That prices in the market place reflect only past information regarding a security

30
Q

The semi-strong view of the efficient market hypothesis believes what?

A

That prices reflect all past and current publicly available information regarding a security

31
Q

The strong view of the efficient market hypothesis believes what?

A

That past, present and even non-public information is already reflected in a securities price

32
Q

An investor in their late seventies dies with 250,000 in their traditional IRA. They have name their 35-year-old son as the beneficiary on the account. What is true as it relates to the minimum required distributions from the account?

A

It will be based on the life expectancy of the son

33
Q

If investors have priced in the expectation for generally increasing prices in the marketplace, the yield curve most likely to reflect that expectation would be?

A

Ascending

34
Q

To find a corresponding price for a given yield, you would look in what?

A

A basis book

35
Q

Which policy believes that lower taxes will encourage economic activity and help the economy grow resulting in a higher overall level tax collection?

A

Supply side economic policy

36
Q

Which risk only relates to fixed income securities?

A

Credit risk

37
Q

The odd lot theory believes what?

A

It believes that the smaller investor buys and sells at the wrong time. If there’s a large number of odd lot by orders the investor would become bearish. If there’s a large number of odd lots sell orders the investor will become bullish

38
Q

What kind of investments can be found in the Capital market

A

Long-term financing vehicles

39
Q

Which act concerns itself with the registration of broker dealers and their required net capital?

A

Securities exchange act of 1934

40
Q

What tells the investor how sensitive the bonds price is to a small change in interest rates?

A

Duration

41
Q

When an agent switches firms what notifications are required?

A

The agent, the former firm and the new firm is required to notify the administrator

42
Q

Under the Act who can issue an injunction?

A

The court

43
Q

Are warrants involved with preferred stock?

A

No they’re only involved with common stock

44
Q

A market order to buy should be executed at what price?

A

The lowest offer price available

45
Q

A market order to sell should be executed at what price?

A

The highest bid price available

46
Q

What is persistent during a period of stagflation?

A

High unemployment and high inflation and high interest rates

47
Q

Insurance company securities and insurance holding companies exempt under the USA?

A

Insurance company securities are exempt but not insurance holding companies. Common carrier securities are exempt such as airlines, railroads and trucking

48
Q

An investors recourse will be lost if they do not accept a firms bonafide offer of rescission in how many days?

A

30

49
Q

A bank may borrow money from the Federal reserve board and may pay the what?

A

Discount rate

50
Q

A value investor typically buys stocks with what kind of ratios?

A

Low PE ratios and low price to book ratios

51
Q

What is the only way to sell unregistered non-exempt securities lawfully?

A

It is through an exempt transaction such as a private placement

52
Q

The investment policy statement of a qualified retirement plan is best described as?

A

A written document that describes the plans investment objectives and guidelines

53
Q

Regulation T is controlled by who?

A

The Federal reserve board controls the extension of credit for securities purchases under regulation T

Practice Test Questions (3 decks)

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