1
Q
A company very concerned about _____ would want a ______ current ratio
A
liquidity, HIGH
2
Q
On a company’s financial statement, it is most likely to contain _____ methods used as well as ______ that may impact company’s financial health and performance
A
Accounting methods, philosophy
3
Q
When using the ACATS system, the ____ form is sent to the ____ firm by the ____ firm
A
TIF, carrying, receiving
4
Q
A buy limit order is used to buy at a Lower price (when market moves ____)
A
Down
5
Q
A buy stop order is used to buy in a short position at a higher price (when the market moves ____). To protect the gain, a buy stop order would be placed just ____ where the stock is currently trading
A
Up, above
6
Q
Growth companies would be least likely to pay _____ as their earnings, if any, are put back into the company to help fund _____
A
Dividends, growth
7
Q
If a stock has not been held more than 12 months, and a put is purchased, the output erases the ______ for any shares the put subsequently allows the holder to sell
A
holding period
8
Q
Purchases of long securities on margin and the short sale of securities causes the SMA to ____
A
Decrease
9
Q
If it’s not a short account, Reg T deposit must be the whole amount if not 2000 or more
A
True
10
Q
_____ earnings represents income that has not been paid out to shareholders
A
Retained earnings
11
Q
When a broker dealer chooses to close out a customer’s position rather than request an extension for payment, the account will be frozen for ______ days
A
90
12
Q
A municipal firm purchases a block of municipal bonds in anticipation of a price increase, the firm is engaged in _______trading
A
Positions trading
13
Q
When a company issues additional bonds, leverage is _____
A
Increased.
14
Q
______ is the use of someone else’s money at a fixed cost to benefit the common shareholders
A
Leverage
15
Q
For stock trading under $5 a share, a customer must maintain 100% of SMV or ____ a share, whichever is greater.
A
$2.50
16
Q
SEC rules require that trade blotters and ledgers be kept for _____ years
A
6
17
Q
Customer statements must be kept for ___ years
A
3
18
Q
Fingerprint cards for terminated personnel, audio tapes of orders handled by the trading room, and customer statements must all be held for ____ years
A
3 years
19
Q
For _______, there is no age at which withdrawals must commence
A
nonqualified annuities
20
Q
A combination is composed of a long call and a long put, or short call and short put, each having different ____
A
Strike prices
21
Q
Writer of a combination expects the market to be _______
A
Stable
22
Q
Buyer of a combination expects the market to be ______
A
Volatile
23
Q
A customer should receive a current option disclosure document before or at the date of ______
A
Account approval
24
Q
Rating of the issue, block size offered, and maturity of the issue are least impactful to a ______ bond issue
A
Muni bond issue
25
A bond confirmation will show ______ if the bond has been called under an in whole call provision
Yield to Call
26
All limit orders stand in ______priority
Time priority
27
Equity is only affected by changes in market prices and never by sales of ______ in the account
Securities
28
True or False: Account statements include security positions at the end of the statement, total cost of purchases and net proceeds of sales, and interest charged on debit balances in margin accounts
True
29
Sales tax is the most common type of ____ tax
Regressive
30
Mark to the market often occurs in connection with ____ transactions
Margin
31
Mark to market can occur because of a change in the stock’s market value covered by a _____
contracts
32
Mark to the market may result in a request for _________
Additional collateral
33
A _____ rule disallows claiming a tax loss on the sale of stock if the investor purchases a substantially identical security within 30 days either before or after the date of such sale
Wash sale
34
If a BD is not self clearing, extension requests made to the BD’s self regulatory organization on behalf of the customers would be made by the broker dealer’s ______
Clearing Agency
35
The _______ on which the option is listed is where there will be a trading halt listed for halts for underlying stock
options exchange
36
Market orders a permitted on both ____ and ____ equity markets
Nasdaq, NYSE
37
A stock split DOES NOT have an impact on _____
Retained earnings
38
______ cannot accept market not held orders
Specialists
39
For market ______ orders, a small portion may be ______ at a time
not held, Filled
40
No matter how long records are retained, for the first 2 years, they must be ______
Readily accessible
41
A ____ spread follows a market-neutral strategy
Time
42
Not held orders must be executed as a ____ order
Day
43
Pursuant to Reg T, cash dividends received in a customer’s margin account can be withdrawn anytime within the first _____ days of receipt
30
44
The _____ determines which over the counter securities are eligible for purchase on margin
Federal reserve board
45
ECN’s are categorized to be type of what market?
4th market
46
A REGISTERED PRINCIPAL must approve all orders _____
By the end of the trading day
47
Short sales may be made when? At the market ____ and _____
Open and close
48
Short sales can be made at any time during the _____
Trading day
49
Zero coupon bonds provide accumulation of _____
Capital
50
Zero coupon bonds provide protection against _______ risk
Reinvestment
51
When a company liquidates, what is the order it does so out of these:
1. General creditors
2. Preferred stock
3. Subordinated debentures
4. Accrued taxes
4. Accrued taxes
1. general creditors
3. subordinated debentures
2. preferred stock
52
Issuing callable preferred stock does what?
Raises capital
53
Making a rights offering does what?
Raises additional capital
54
For TRACE- to ensure proper audit trail requirements, trades are reported by _______ of the transaction
Both sides
55
Qualified dividends are considered to be what type of income?
Portfolio
56
A member firm may commingle the securities of two or more customers with the customer’s ______
Written permission
57
If a customer purchases a non exempt security in a cash account for regular way delivery, Reg T requires the executing BD to receive payment in full no later than _____ business days AFTER the trade
3 business days
58
If a customer wishes to open a cash account, who is the only one who must sign the new account form?
Only the principal
59
What 2 orders help to acquire a security at a specific price or better?
Buy stop limit
Buy limit
60
Deferred compensation retirement plans do not get a current _______
Tax deduction
61
When a bond is issued by a national government- it is called ____ debt
Sovereign
62
Those in the import/export business use ______ called bankers acceptances
lines of credit
63
The bank guarantees what kind of security?
Negotiable CD’s
64
What market are negotiable CD’s traded?
Secondary market
65
A ______ debt security could be considered to be a debt security
Convertible debt security
66
Municipal bonds and listed options settle when?
The next day
67
SMA: when it comes to stocks trading under $5 a share, customer must maintain 100% of SMA of $2.50 a share, whatever is higher
True
68
The concept of double taxation applies to shareholders of ____ corporations
Two taxes are taxes on corporate earnings and taxes on any dividends distributed to the shareholders
C
69
For oil and gas programs, rank them most risky to least risky (EDI)
Exploratory
Developmental
Income
70
____ allocation is the most common sharing arrangement for general partners and limited partners
Functional
71
VIX index reflects change over next ____ days
30
72
For a rights offering, a ______ is used
standby underwriter
73
When applying a ______, you can accomplish issuing new bonds with an _____ on the project’s revenues
bonds test, equal lien
74
When there is a significant need for raising capital- what is the best corporation to use?
C-corporation
75
Gifts from a person associated with a FINRA firm may not exceed $_____ a year
100
76
US investors can invest internationally through ____ or _____
Mutual funds, closed end funds
77
These kind of quotes are allowed by a ____ dealer
Bona fide quotes
Requests for offers only
Requests for bids only
Municipal
78
Treasury STRIPS and Treasury receipts are quoted on _____
Yield to maturity
79
When dealing with annuities, life income options pay the annuitant for life but don’t do so after the annuitant ____
Dies
80
For Jumbo CD’s, the FDIC only insured up to ______
$250,000
81
A stock mutual fund wishes to advertise itself as diversified and to be able to do so, the fund must invest its total assets so that at least ______ of its assets meet stated diversification requirements
75%
82
For market not held orders, a small portion may be filled at one time, and it gives the floor broker discretion over the ____ or ___ time of execution
Price or time
83
Taping firms retain copies of all mandated recordings of a period of ___ years from the date the tape was created
3
84
When a customer dies, you should ___ all open orders, mark the account ____ and ____ the assets
cancel, Deceased, freeze
85
For convertible bonds, in a bearish equity market, convertible bonds would at least provide income and allow you to benefit from upside market movement if the equity market turns ____ later
Bullish
86
For muni bonds, order tickets must list whether a trade is ___, ____, or _____
Solicited, unsolicited, discretionary
87
______ for oil and gas limited partnerships can be taken based on the amount of the natural resource that is ___
Depletion allowances, Sold
88
Most mutual funds operate as regulated investment companies and means that they qualify for ______ under ________ of the Internal Revenue Code
special tax treatment, Subchapter M
89
What is the largest component of the municipal underwriting spread?
Total takedown
90
Total takedown is made up of the _____ and ______
Additional takedown, concession
91
_____ fee is the smallest component of a municipal underwriting spread
Management
92
True or False: Boardmembers select chairman, not the common stockholder
True
93
A ____ fund has the stated objective to invest in securities of US domiciled entities, as well as those domiciled in foreign countries
Global
94
Under code of arbitration, no claim is eligible for submission if ____ years or more have elapsed since the time of the event
6
95
If a person is calculating the cost basis for a nonqualified variable annuity, the person is using the ____ dollars contributed
After tax dollars
96
What are the minimum requirements for listing on the NYSE
-number of shareholders
-Market value of publicly held shares
-Number of publicly held shares
97
US corporations buy back its common stock on the open market to use it for _____
Stock option plans
98
US corporations buy back its common stock on the open market to use it for _____
Future acquisitions
99
US corporations buy back its common stock on the open market to increase _____ per share
Earnings
100
UIT’s are _____, not managed
Supervised
101
Trade confirmations and account statements are kept for ____ years
3
102
A blind pool offering is one in which ____% or more of the properties are not specified
25
103
Trading in expiring options series concludes the same day as expiration at _____PM EST
4PM EST
104
Computation for the coverage ratio for municipal revenue bond issue is _____ divided by _____ and _____ expense
Net revenue, annual interest, principal expense
105
Share identification for tax reporting when selling shares of mutual funds shows the highest ____ generating the ___ gain
Cost basis, least
106
True or False: Section 28(e) of the SEC Act of 1934 deals with a safe harbor for non-cash comp from broker-dealers to investment advisers
True
107
Phantom income is a term associated with _____ bonds
Zero coupon
108
Typically, a sound debt service coverage ratio for muni bonds is ____
2:1
109
Reg SHO requires that the short seller borrow or establish a locate for the short stock to be delivered to the buyer. This means that before the execution or trade of any short sale of stock, firms must locate the stock for borrowing to ensure the delivery of the stock will be made on the _____
Settlement date
110
Hedge funds have unrestricted share _________ limits
Concentration
111
A muni bond is generally exempt from ____ and ____ income taxes in the state in which it was issued
State and federal
112
ERISA protects employees by having requirements for ____, minimum ____, and _____
Vesting, funding, nondiscrimination
113
Collateralized mortgage obligations (CMO’s) are subject to ____, _____, and _____ taxes
Federal, state, local
114
Balance sheets include the client’s ____ and _____
Assets, liabilities
115
Income statements include ____ and ____
Salary, expectations
116
Can you borrow money on a margin account?
Yes
117
Can you use leverage and less cash in a margin account?
Yes
118
When a note is within one year of maturity, it is considered to be a ____ instrument
Money market
119
When bonds are trading at a premium, the nominal yield is ____ than the _______
Greater, yield to maturity
120
ELN’s stands for
Equity Linked Notes
121
If a customer fails to meet a Reg T call of $2,500, securities may be sold out of the account with ____ the reg T cash call, so this one would be $_____
Twice, $5,000
122
Form 144 applies to ____ shares or securities purchased in a private placement
Unregistered
123
Section 1035 allows for an exchange of an annuity to another ______, whether issued by the same firm, or competing firm
Annuity
124
______ describes the roles of the general and limited partners in a limited partnership
The Partnership agreement
125
Debentures are also known to be a ______ debt security
Convertible
126
When determining the suitability of an investor to invest in direct participation program, the registered rep should evaluate the investor’s financial ability to _____ the entire investment
Lose the entire investment
127
When determining the suitability of an investor to invest in direct participation program, the registered rep should evaluate the current and future ____ of the investor
Tax needs
128
When determining the suitability of an investor to invest in direct participation program, the registered rep should evaluate the investor’s ability to commit the funds for a _______ period
Lengthy
129
Reinvestment risk is the chance that after purchasing a bond, interest rates ____
Fall
130
When gifts are given, the gift tax is based on the gifts value on the ____ it is given
Date
131
Interest on treasury bills, notes, and bonds are taxable as ______ on the_____ level
Ordinary income, federal
132
In a short account you have to meet a requirement of $______
2000
133
Always hedge with _____ market attitude of stock position
Opposite
134
For protection you should _____
Buy
135
For income you should ____
Sell
136
Long call has a
Right to buy
137
Short call has a
Obligation to sell
138
Long put has a
Right to sell
139
Short put has a
Obligation to buy
140
What positions make up a protected put
Long stock
Long put
141
What positions make up a covered call
Long stock
Short call
142
What positions make up a covered put
Short stock
Short put
S7
flashcards
Decks in class (32)
# Cards
-
Tranches9
-
Retirement3
-
Options33
-
Practice Test 267
-
Practice Test 160
-
Practice Test 372
-
Practice Test 459
-
Practice Test 562
-
Practice Test 639
-
Practice Test 749
-
Practice Test 856
-
Practice Test 948
-
Practice Test 1071
-
Practice Math Problems65
-
Practice Suitability Questions21
-
Product Suitability Summaries59
-
Product Suitability 242
-
Refining150
-
Bounce Back 2.0137
-
Bounce Back 3.0180
-
Bounce Back 4.0362
-
Lists55
-
Redemption142
-
Redemption 2119
-
Redemption 3119
-
Redemption 472
-
Redemption 5118
-
Redemption 6186
-
Redemption 790
-
Redemption 880
-
Redemption 995
-
Redemption 10137
