Test 1

Question 1

The current yield on a municipal bond with a coupon rate of 4.50 %, purchased at par and current trading at $1,055, is:

Answer 1

4.26%

Question 2

A U.S. government bond is selling in the market at 95.28. The dollar value of this bond is:

Answer 2

$958.75

Question 3

What is true concerning periodic payment variable annuities?

Answer 3

A clients number of annuity units never changes

Question 4

What is the most likely result of persistent deflation?

Answer 4

A decrease in interest rates

Question 5

Which types of investments have historically shown a great deal of sensitivity to regulatory risk?

Answer 5

Limited partnerships

Question 6

The form 10-K must be filed when?

Answer 6

At the end of the issuers fiscal year

Question 7

Who keeps track of the shareholders of a mutual fund?

Answer 7

The transfer agent

Question 8

An investor shifted the allocation of corporate bonds in his portfolio to ADR’s. As a result he will be more exposed to:

Answer 8

Political risk

Question 9

If a customer exceeds SIPC limits:

Answer 9

The customer is a general creditor

Question 10

What characterizes leveraged ETFs?

Answer 10

They are designed to deliver a multiple of the performance of an index or other benchmark

Question 11

During a period of stable interest rates, which type of preferred stock tends to be the most volatile?

Answer 11

Convertible

Question 12

A corporation will be paying a cash dividend to its shareholders. On what date will the market price of the stock be reduced?

Answer 12

Ex-date

Question 13

A 5% $1,000 par value bond sells at $900 and matures in 10 years. What is the amount of each interest payment?

Answer 13

$25

Question 14

What bond has the least amount of risk?

Answer 14

US Treasury Bond

Question 15

What is found in a preliminary prospectus?

Answer 15

The number of shares being issued

Question 16

A confirmation must be sent to a customer no later than:

Answer 16

The completion of the trade

Question 17

A REIT will receive preferential tax treatment if it distributes at least what percentage of its income to shareholders?

Answer 17

90%

Question 18

A stock that typically performs in parallel to the changes in the economy is referred to as:

Answer 18

Cyclical stock

Question 19

When do options trades settle?

Answer 19

T+1

Question 20

What is true about ECNs?

Answer 20

They can be used by investors who want to trade anonymously

Question 21

What’s the maximum profit for the buyer of a call option?

Answer 21

Unlimited

Question 22

Closed end investment companies:

Answer 22

Offer a fixed number of shares