Test 2 Flashcards
An index option has been exercised. What is the writer of the option required to do to satisfy his obligation?
Deposit cash equal to the difference in the strike price and the value of the index?
A fee based account is most suitable for customers who:
Engage in frequent trading
What is used to prevent the price of newly issued stock from falling?
Stabilization
A convertible bond has a conversion price of $50 and is currently selling in the market at $1,100. The conversion ratio is:
20
Of the broad based indexes, the one with the largest measure of the market is:
The Wilshire Associated Equity Index
If an equity option is exercised, when does the stock transaction settle?
T+2
Premature withdrawals of earnings from an IRA that qualify for an exception are subject to:
Ordinary income taxes on the amount withdrawn, but not a 10% penalty of that same amount
What investment company does not charge a management fee?
Unit investment trust
What bond is secured by a specific recent source from a project?
Municipal revenue bonds
B/D’s are required to send balance sheets to customers every:
Six months
The fund that would have the lease price volatility is:
A short term corporate bond fund
What market is concerned with securities listed on an exchange but traded in the OTC market?
Third market
The minimum denomination for negotiable certificates of deposit is:
$100,000
A person who invests in a variable annuity would be most concerned with the performance of the insurance company’s:
Separate account
MSRB rules do not apply to:
Issuers
Interest of TIPS is:
Subject to federal income tax, but exempt from state income tax
A person who invests in a fixed annuity is most concerned with the performance of the insurance company’s:
General account
A type of offering in which whatever is not sold is retained by the issuing corporation is:
A Best efforts underwriting
Who has the responsibility to investigate the accuracy of the info in a prospectus for a DPP?
The managing underwriter
The purchase price of a no-load fund is determined by the:
Net asset value
A bond has a 6% coupon rate and is trading at a 6.78% basis. The bond is trading at a:
Discount
