Practice Test 8

Question 1

Even if a registered rep would like to increase their production by working nights and weekends at home, they cannot use their personal emails because the firm has no way of ______ them

Answer 1

Auditing

Question 2

Under SEC Rule 145, which distributions from an issuer are exempt from the requirement to file a registration statement? ____ dividend, _____ stock split, _____ stock split

Answer 2

Stock dividend
Fractional stock split
Whole stock split

Question 3

During the cooling off period, the only items that do not constitute as an offer or sale are the prospectus. A _____ counts as something that would be an offer

Answer 3

A research report

Question 4

Agreement amongst underwriters is known as the

Answer 4

Syndicate agreement

Question 5

In an underwriting, when a syndicate member sells the issue DIRECTLY to the public, they receive an _______. To selling group members it is a ___

Answer 5

Underwriter’s concession, sellers concession

Question 6

What 3 pieces of info are found in a new issue tombstone announcement? (NAT)

Answer 6

Names of the underwriters
Aggregate offering price
Type of security offered

Question 7

When it comes to Coverdell account, who can the beneficiary by changed to?

Answer 7

Any relative of the same or later generation

Question 8

Terms such as permanent, cash value, and policy loan are associated with ______

Answer 8

Variable life insurance

Question 9

Loan value of a LEAP option with over 9 months to expiration is ____%

Answer 9

25%

Question 10

Reg T controls credit on securities from _____ to _____

Answer 10

Broker to customer

Question 11

True or False: When opening a joint account you can use either person’s social security number but can only use 1- even when married

Answer 11

True

Question 12

Prior to opening an options account, you must ____ the first transaction in the account

Answer 12

Approve

Question 13

When a registered rep prepares the firms standard options worksheet for a customer, the customer must receive an Options Disclosure Document ____ receiving or ____ completed standard options worksheet

Answer 13

Before, with the

Question 14

True or False: Even if it is a 1 time event and you are paid a finders fee, you are still considered to be a Municipal Finance Professional

Answer 14

True

Question 15

MSRB was created and empowered to _____ record keeping procedures, _____ of information on ______ to customers, and _____ requirements

Answer 15

Regulate, disclosure, confirmations, suitability

Question 16

Prior to opening an account that will engage in day trading, the customer will be provided with a _____ document

Answer 16

Disclosure

Question 17

If a customer wishes to open an account at your firm by purchasing mutual fund shares, but has previously done so at another firm, he qualifies for a _____ reduction

Answer 17

Breakpoint

Question 18

If a Bids Wanted (BW) quote is posted, the dealer must intend to ____ the bonds

Answer 18

Sell

Question 19

First use of funds under a gross lien revenue pledge is to pay the _____ fund

Answer 19

Debt service

Question 20

PSA stands for

Answer 20

Prepayment Speed Assumption

Question 21

Treasury bonds have a lower level of credit risk than ____ bonds

Answer 21

GO

Question 22

T Bills are registered in the owners name in book entry form, and are issued at a ___

Answer 22

Discount

Question 23

T Bills are non_____

Answer 23

Callable

Question 24

T Bills cannot be used as the underlying collateral for treasury receipts because the ____ of a treasury bill is too short

Answer 24

Maturity

Question 25

When yield curve is inverted, demand for long term debt greatly exceeds demand for short term ____ securities

Answer 25

Money market

Question 26

When the yield curve is inverted, the Fed is pursuing a tight money policy, and investors are likely to shift funds out of equity investments into ____ instruments

Answer 26

Money market

Question 27

When yield curve is inverted, ____ term interest rates are ___ than ____ term interest rates

Answer 27

Short Higher Long

Question 28

Yield to maturity is also known as

Answer 28

Basis

Question 29

If a corporation has a dividend payout ratio of 75%, the undistributed earnings (25%) will increase ____ earnings

Answer 29

Retained

Question 30

Tactical portfolio selection is the variation permitted in target asset allocation for each ____ selected for investment

Answer 30

Asset class

Question 31

Government securities and money markets are actively traded and are ___, but aggressive growth funds are small and are not as ____

Answer 31

Liquid, liquid

Question 32

If you open a custodial account for your kids and the grandparents donate too, the income is still taxed to ___

Answer 32

You- Since you opened the account for the minor

Question 33

Capital gains from selling muni’s are exempt from _____ tax

Answer 33

Federal tax

Question 34

Is it common for General Partners to receive a greater percentage of income than limited partners?

Answer 34

Yes

Question 35

ADR is a foreign security held in foreign branches of ___

Answer 35

US Banks

Question 36

During times of stable interest rates and increasing stock prices, what has the greatest price volatility?

Answer 36

Convertible stocks

Question 37

Feasibility studies are done for ____ bonds

Answer 37

Revenue

Question 38

If a municipal bond issue is oversubscribed, how will the orders be filled?

Answer 38

By the type of order

Question 39

___ quotes require a market maker to reconfirm the quote. Percentage of par quote is a ___ quote

Answer 39

Subject, Dollar

Question 40

An institutional investor who is trading NYSE listed securities for their own account over the counter, but is not trading over an ECN would be trading on the ___ market

Answer 40

Third market

Question 41

In JTIC, even if one party does not trust the other, and there is no evidence, you can still authorize withdrawal but must make the check payable to ____

Answer 41

Both parties

Question 42

Fixed annuity is an

Answer 42

Insurance product

Question 43

Cross market trading halt thresholds include what percentages?

Answer 43

7%, 13%, 20%

Question 44

Broker dealer IS NOT required to provide a customer who has an account the trades in penny stocks with a ______

Answer 44

Current prospectus

Question 45

For Munis, final official statement must be submitted by the underwriter to which organization?

Answer 45

EMMA

Question 46

Portfolio margining is risk based and is calculated using ______ loss percentages

Answer 46

Probability based

Question 47

True or False: If someone has POA, but elder abuse is suspected, you can go to the principal with the request and have them handle the situation

Answer 47

True

Question 48

Certificates of Participation are backed by a pledge of lease ____

Answer 48

Revenues

Question 49

An acceptable method for opening an investment adviser account incomes the adviser opening an ___ account holding all of his or her clients funds and securities

Answer 49

Omnibus

Question 50

Warrant valuation is directly influenced by the market price of the ____

Answer 50

Common stock

Question 51

Warrant’s evaluation reflects market expectations for ____ earnings of the company

Answer 51

Future

Question 52

Warrant valuation reflects the ___ of the instrument

Answer 52

Life

Question 53

Accrued interest on a new issue corporate bond is calculated from __ date to ____ date

Answer 53

Dated, settlement

Question 54

TRACE reports trades ___, ____, and ____ bonds

Answer 54

Corporate, government, agency

Question 55

For mutual funds, ex date is set by the ___

Answer 55

Board of directors of the fund

Question 56

An extension request under reg T gives how many days

Answer 56

2 days