Test 4 Flashcards
An individual who is considering the purchase of closed-end fund shares would pay:
A market price as determined by the supply and demand for the shares
A stocks price has risen due to an overall market increase. This increase in price is considered:
An UNREALIZED capital gain
A corp has raised money to use for expansion within the next 6 months. Which of the following securities should the corp invest the funds until they are used?
High quality commercial paper
Where is a FINRA member required to place a link for FINRA’s BrokerCheck website?
On the first landing page of the BD’s publicly available website.
Can ETF’s be sold short?
Typically, yes.
Which preferred stock must be paid all of the dividends in arrears (missing) before the dividend can be paid on its common shares?
Cumulative preferred
What is the rate that’s charged when a member bank borrows from the Federal Reserve?
Discount rate
A corps shareholders must vote for:
Stock splits
An investor rolled over $900,000 from a 401k plan to an IRA. She’s concerned the market will fall dramatically. About what risk is the investor most concerned?
Systematic risk
A stock power is a document that’s used to:
Assign a certificate to a new owner
Which organization provides clearing for equity securites?
National Securities Clearing Corp (NSCC)
What is the primary disclosure doc for a municipal offering?
Official statement
What is a characteristic of a closed end fund?
Bought and sold on an exchange
During a deflationary period, interest rates:
Decrease, causing bond prices to rise
What type of account can an uncovered call writing strategy be executed?
Margin
What is true about penny stocks and blue chip stocks?
Penny stocks are less liquid
A bond is selling at a premium. This indicates that:
Interest rates have decreased since the bond was issued
The day-to-day business activities of a UIT are the responsibility of the:
Trustee
The beneficiary of a section 529 plan may make qualified withdrawals from the plan for:
Paying the tuition for an out of state college
If a client placed an open GTC order for a stock listed on the NYSE, it will:
Remain active until executed or cancelled, but must be renewed according to exchange rules
For an IDB, the primary source that backs the bond is:
The leasing corporation only
What is considered a coincident economic indicator?
The industrial production index
What is true about REITS?
They are required to distribute the same percentage of taxable income as exchange traded REITS.
What’s the current yield for a bond that’s priced at par and offers a $40 semiannual interest payment?
8%
What is true about custodian accounts?
A donor may give gifts of cash and securities
What is used as a disclosure document for a private placement?
Offering memorandum
What has the greatest amount of capital risk?
Equity options
