Test 3 Flashcards
Which of the following are issued with a specified fixed rate of interest?
US government bonds and notes
Some securities are exempt from the registration and prospectus requirements of the securities act of 1933. All of the following securities are among this exempt class
Commercial paper that has a maturity not exceeding 270 days
A security issued by a nonprofit organization
Us government securities
Which of the following is true regarding a nonqualified retirement plan?
Excess over cost basis is taxed
It can discriminate in offering its benefits and selecting participants
Tax on accumulation is deferred
A customer has not paid for a stock transaction in 4 business days and has been refused an extension. The member firm
Must cancel or liquidate the order by immediately selling the securities
The insider trading act of 1988 has set guidelines for imposing penalties including civil actions in a federal court. The maximum penalty a court can impose for insider trading violations is
An amount up to 3 times the profit gained or loss avoided
Which of the following must be filled to establish a corporate margin account?
Corporate resolution
As identified by the office of foreign assets control OFAC who is a specially designated national SDN?
A person who has been identified as a terrorist or narcotics trafficker
All of the following are true regarding electronic communications networks
They are used for forth market trades
They facilitate trades between institutions
Transactions are executed without the broker
Which of the following hedging positions best reduces risks?
Buy 100 shares of ABC stock and buy 1 ABC put
Which of the following statements is true?
Covered options writers own the underlying shares
Which of the following best describes a workable indication from a dealer?
An estimate
Which of the following describes a market maker?
A broker dealer that assumes the risk of holding an inventory of shares of stock in order to facilitate the trading of that security
The options position limit on XYZ stock is 200,000 contracts. Bob a high roller is short 150,000 XYZ Dec 50 puts. Which of the following trades would put Bob in violation of position limits?
Buy 60,000 XYZ Mar 60 calls
An investor purchased 100 shares of an investment company and paid the market price plus a commission. What did the investor purchase?
Closed end investment company shares
An options spread with the same expiration but different strike prices is called a
Vertical spread
All of the following are considered conflicts of interest for the general partner in a limited partnership except
Accepting $20,000 for a covenant not to compete with the limited partnership
The lowest yielding CMO tranche is the
PAC
Which of the following is not correct regarding 529 plans?
Withdrawals are taxed as ordinary income
How often must broker dealer report political contributions of their municipal finance professional to the SRO?
Quarterly
which if the following is NOT concerning physical safety of mutual fund holdings?
Securities cannot exist as electronic records in computers
Business continuity plans are required to address all of the following except
Protecting member profitability
Preemptive rights allow a stockholder to
Maintain proportionate interest in the company
The type of investment risk that impacts buying power and results in devaluation of assets is called
Inflation risks
According to MSRB rules a certificate would be considered mutilated and not in s good delivery form if any of the following is not ascertainable except
The CUSIP number
Which situation would cause the US exports to become less competitive that foreign exports
The US dollar strengthens when compared to foreign currencies
Which of the following activities may a nonregisterd person perform?
Provide quotes
The agreement among underwriters also known as the syndicate letter is a document that
Is an agreement between participating broker dealer who assume liability for any unsold shares and specified the underwriters responsibilities and participation percentages
The term double barreled is used to refer to which of the following ?
Certain municipal bonds where a taxing authority guarantees debt service payment in the event that pledged revenues are insufficient
Which of the following is true about treasury bills?
They are issued in book entry form
The term for active stock that represents the number of shares owned by the public is
Outstanding stock
A registered representative with oral authority from the customer can decide which of the following?
Time and price
Which of the following settlements options will give the annuitant the highest periodic payment?
Straight life
A financial institution has large portfolio of US treasury notes and is concerned that interest rates are about to increase. Rather than selling off the notes thereby creating portfolio volatility the institution could attempt to offset the portfolios unrealized losses by
Buying t note puts
