Test 6 Flashcards
During a period of RISING interest rates, an individual who invests in mortgage backed securities is MOST concerned with:
Opportunity risk
State or Blue Sky Laws may require a Registered person to do what?
File an app, pass an exam, and pay a fee
An employee of a broker dealer is NOT permitted to purchase an:
Equity IPO
What is an investment that can be purchased on margin?
Closed end fund shares
The guidelines regarding brokerage employees opening personal accounts with other brokerage firms do not apply if the transactions in the account involve which of the following securities?
Mutual funds
Treasury Bonds are subject to federal taxes, but
Exempt from state taxes
If a bind has a basis of 6.35 and a coupon rate of 6.15%, the biggest f is selling at a
Discount
Common stock and preferred stock are similar in that
The dividends for both must be declared by the board of directors
While saving for her retirement, a variable annuity owner investing $1000 a month will buy a
Varying number of accumulation units
What stock would he considered a defensive stock?
Utility stock
If an investor wants to build a portfolio that maintains a stable value, she should purchase bonds with
Short maturities
What investment has the most inflation risk?
Bonds
What is a part of a financial institutions AML program?
Maintaining a record of wire transfers in excess of $3,000
If the bid price for a stock is 20.50 and the ask price is 20.60, a client who enters a market order to sell the stock will most likely receive:
$20.50 minus a commission
What is subject to a capital call?
DPP’s
The primary purpose of the NASAA is to
Create rules, laws, and exam requirements for states
What is true for the writers (sellers) of put options?
They have the obligation to buy 100 shares of stock.
Investors in mortgage backed securities are MOST concerned with prepayment risk if interest rates are
Falling
For how long must prospectuses continue to be delivered on an IPO of a company that will not be listed?
For 90 days in the aftermarket
A 75 year old individual has contributed $40,000 to a qualified plan that currently has a value of $100,000. If she decides to take a lump sum of the total value, she is taxed on:
$100,000
Which of the following option positions obligates the investor to sell shares if exercised against
Short a call
What strategy is a portfolio manager of a mutual fund employing when call options are being sold on stock that’s held in a portfolio?
A neutral strategy that’s considered a conservative means of generating income when prices are stable
