Test 2 Flashcards
Realized appreciation is
The net appreciated value in a security that has been sold
A legal entity that offers securities to investors is
An issuer
The fed fund rate is the interest rate that
One bank charges another for overnight borrowing
What are the benefits of writing covered calls?
Income and partial hedge
Face amount certificates issue debt certificates that offer predetermined interest sum payments. These certificates have a maturity of at least
24 months
A customer placed a market order. This means
No price is set and the order is to be filled at the best available market price
A redeemable security is
A security with no secondary trading
An income statement
Covers financial activity over a period of time
All of the following are true regarding electronic communication networks (ECNs)
They are used for fourth market trades
They facilitate trades between institutions
Transactions are executed without the broker
If the gross domestic product of one year is compared to the GDP of another year the comparison would be most valid if it were made
In constant dollars
An investor is interested in a REIT that will provided immediate income. The investor would be best served by
Mortgage REIT
Which of the following apply to a put option contract?
The right to sell at a strike price
The obligation to buy at a strike price
Which of the following is synonymous with market risk?
Systematic risks
Regarding CDSCs which of the following is true?
They represent alternate methods of recovering fund market costs
For a given holding period costs associated with each class will differ
The different share class options should always be pointed out by the rep
Which type of stock would a person own for the best type of assurance of receiving a dividend income?
Cumulative preferred
The ex dividend date is
The first date in which the stock trades without the dividend
Government securities regular settlement is
Next day
The act that requires financial institutions to develop implement and monitor procedures that prevent its agents and associates from misusing nonpublic information is the
Securities and exchange act of 1934
In a custodian account the responsibility of tax liabilities from dividends interest income and capital gains belong to the
Minor
According to FINRA rules which of the following fall under the definition of a independently prepared reprint
A copy of a magazine article of retirement planning issued by a publisher that is not affiliated with the member
Which of the following statement regarding limit orders is true?
A limit may never be executed
Which of the following joint account is designed specifically for married couples?
Tenancy by the entirety
Which of the following is true about treasury bills?
They are issued in bio entry form
Your client has a portfolio of treasury bonds you are concerned about a rise in interest rates. Which of the following would you recommend?
Buy t bond puts
Which of the following hedging positions best reduces risks?
Buy 100 shares of ABC stock and buy 1 ABC put
Which type of investment company issues certificates that can be redeemed for a fixed amount on a specified date
Face amount certificate
Which of the following may not be purchased on a margin?
Mutual fund
What is an underwriters maximum sales charge?
10%
Which of the following would ensure that the number of shares printed on the stock certificates are equal to the number of shares that are outstanding for the corporation
Registrar
All of the following are characteristics of unit investment trust?
Units are redeemable by the issuer
A fixed portfolio
No secondary market trading
Which of the following instruments trades on a discount yield?
Treasury bills
Which of the following is true regarding an individual account?
No one but the owner may give trade instructions unless the customer has provided advanced written permission
