Practice Test 1

Question 1

Can a shareholder authorize a company manager to cast a vote as indicated?

Answer 1

Yes

Question 2

In situations where one company is owned by a parent company, representatives must disclose a _____ verbally and follow up with written disclosure before the transaction is complete

Answer 2

Control relationship

Question 3

Moderate level risk includes

Answer 3

60% equities, 40% fixed income securities

Question 4

Investment grade corporate bonds are considered ____ income

Answer 4

Moderate

Question 5

Large and small cap bonds and funds are considered to be primary for the goal of ____ growth

Answer 5

Capital

Question 6

A firm can wait until a customer account is opened to comply with a _____ ______ program

Answer 6

Customer identification

Question 7

Direct registration records the _____ name on the books of the ____

Answer 7

Owners, transfer agent

Question 8

Dividends and interest payments on direct registration securities are received from the ______ or the _____

Answer 8

Issuer, transfer agent

Question 9

________ index fund must periodically be rebalanced if the stocks included in the index are changed

Answer 9

Standard and poor

Question 10

Preservation of capital means that the customer cannot sustain a loss. What’s an example of this?

Answer 10

A money market fund

Question 11

_______ do not need to be kept for specified time periods

Answer 11

Official statements

Question 12

Sales literature includes

Answer 12

Research reports
Password protected websites
Scripted speeches given to more than 25 existing or prospective clients
Market letters or letters delivered to more than 25 existing or prospective retail clients

Question 13

Managing underwriter can act as a ______

Answer 13

Stabilizing market maker

Question 14

Copy of a offering circular or private placement memorandum can be provided to obtain a ______ exemption

Answer 14

Private placement

Question 15

_________ derived from no essential use private revenue bonds is included in the _____ minimum tax computation

Answer 15

Interest income, Alternative

Question 16

Nominal interest rate on _____ approximates the real ____

Answer 16

TIPS, Interest rate

Question 17

Gives an undivided interest in a pool of mortgages

Answer 17

Pass through certificate

Question 18

Highest major interest rate in the economy is the ___ rate

Answer 18

Prime

Question 19

Are municipal bonds a good choice for an IRA?

Answer 19

No

Question 20

In a corporate underwriting a syndicate member has sold his portion and wishes to place additional orders to be filled from the unsold allocations of other members. These orders will be filled by the manager with the ordering member receiving the ________

Answer 20

Selling concession

Question 21

Are contributions to Coverdell’s tax deductible?

Answer 21

No

Question 22

If a customer has not returned the signed options agreement after 15 days, you can ____ accept orders for _____

Answer 22

Only, closing transactions

Question 23

Mutual funds send their financial statements to shareholders ____

Answer 23

Semi annually

Question 24

Variable rate municipal notes are NOT subject to ______ rate risk

Answer 24

Interest

Question 25

Tax equivalent yield says what the yield on a ____ bond would need to be to be the equivalent to the yield of a ____ bond (CM)

Answer 25

Corporate, municipal

Question 26

Short straddles expect to

Answer 26

Stay the same

Question 27

Corporate bonds are good for someone looking for ______

Answer 27

current income

Question 28

Level of bond sensitivity is measured by ____

Answer 28

Duration

Question 29

Can a manager penalize a syndicate member by taking away their concession if shares are resold to the manager?

Answer 29

Yes

Question 30

Minimum equity for an individual customer to open a portfolio margin account is

Answer 30

$100,000

Question 31

AIR is

Answer 31

Assumed interest rate

Question 32

Type of limited partnership when the specific investments are not known at the time the partnership is formed

Answer 32

Indirect participation program

Question 33

Inverted saucers formation is a ____ trend

Answer 33

reverse upward

Question 34

Treasury stock does not have ____, like normal stocks do

Answer 34

Dividends

Question 35

Are Faxes subject to the telephone act?

Answer 35

Yes

Question 36

Are Eurodollars sold all over the world?

Answer 36

Yes

Question 37

Mutual funds do not have to offer investors a ______

Answer 37

Family of funds

Question 38

To impose max sales charge, mutual funds offer

Answer 38

Breakpoints Rights of accumulation Letter of intent

Question 39

Calamity call occurs when the issuer calls in bonds when the issues underlying collateral is ____

Answer 39

Destroyed by a natural cause or disaster

Question 40

When can a listed issue be routed to the ECN?

Answer 40

If the priced offered on the ECN is better

Question 41

Do REITs pass through gains and losses

Answer 41

Only gains

Question 42

Do limited partnerships pass through gains and losses

Answer 42

They have a benefit because they also psss through losses

Question 43

Municipal security’s ______ are NOT required to be prepared by issuers by the ______ rule making board

Answer 43

Official statements, Municipal Securities

Question 44

Password protected website maintained by a firm is considered to be _____

Answer 44

Sales literature

Question 45

Nominal interest on ____ approximates the real interest rate

Answer 45

TIPS

Question 46

Preferred dividends received, common dividends received, and convertible preferred dividends received are all partially excluded from _____

Answer 46

Income tax

Question 47

In a corporate underwriting, a syndicate member that has sold its portion wishes to place additional orders to be filled from the unsold allocations of other members. These order _____ be filed by the manager with the ordering member receiving the selling concession

Answer 47

Will

Question 48

A promise by a municipality to call in a bond issue if the facility built with the proceeds of the offering is condemned is a ______

Answer 48

Calamity call covenant

Question 49

When opening a joint account, both parties ____ endorse a check for deposit, but it can be dispersed by either party

Answer 49

Cannot

Question 50

What kind of registration issues books in the owners name and is held in book entry form by the issuing company on the owners behalf

Answer 50

Direct registration

Question 51

What kind of preferred stock may receive a bigger dividend depending on some benchmark external to the company?

Answer 51

Adjustable rate stock

Question 52

In new issue offerings, there is nothing that can release a syndicate member from total ____

Answer 52

Liability

Question 53

Dividends and interst payments on direct registration securities are received from the issuer or ____

Answer 53

Transfer agent

Question 54

____ is a system that accommodates reporting of transactions in debt securities

Answer 54

TRACE

Question 55

A customer is accepted into a limited partnership when the ____ accepts them

Answer 55

General partner

Question 56

You do not get ____ for 529 savings plans

Answer 56

Federal tax credit

Question 57

Executor of Estate Accounts are considered to be what kind of accounts?

Answer 57

Fiduciary

Question 58

DVP/ RVP means

Answer 58

Delivery vs payment, receipt vs payment

Question 59

Reporting corporate profits is what kind of indicator?

Answer 59

Lagging

Question 60

Who invests in BDC’s (Business Development Companies)?

Answer 60

High net worth investors seeking dividends