1
Q
Who has the final responsibility for debt service on an industrial revenue bond?
A
Corporation leasing the facility
They’re the source of revenue for debt service
2
Q
The public’s attitude towards debt is important in evaluating ________ bonds
A
GO
3
Q
Muni securities are exempt on both the _____ and _____ level. Meaning that they do not need to be registered with the ____ or any _____
A
Federal, state
SEC, state
4
Q
Revenue bonds maturity is typically _____ than that of the facility they were issued to build
A
Shorter
5
Q
When revenue collections are not sufficient to meet debt service requirements, and the issue will be backed by the full faith and credit of the municipality, this is known as a _________ bond
A
Double-barreled
6
Q
1 mill equals $_________
A
$0.001
7
Q
The _______ legal opinion on a muni bond is an attenuation from bond counsel that attests that to its best knowledge, the issuer has the legal right to issue the securities
A
unqualified
8
Q
The _________ contributes to the establishment of recordkeeping requirements for broker dealers and the creation of regulations for participants in the muni’s second market
A
MSRB Securities Acts Amendments of 1975
9
Q
Revenue bonds are backed by _____ fees and GO bonds are backed by _______
A
User, taxes
10
Q
Original issue muni’s that are purchased are treated as _______ interest, and muni’s bought on the secondary market are considered ______ income subject to tax
A
Tax free, ordinary
11
Q
Official statements must be provided _______ or before ______
A
At, Settlement
12
Q
ANY Capital loss will offset _____ Capital gain
A
ANY
13
Q
If a moral obligation goes into default, bond holders can be repaid through a __________
A
Legislative apportionment
14
Q
Gasoline tax, sales tax, business license tax, and tobacco taxes are all _____ taxes
A
Special
15
Q
______ is the adjustment of a cost basis of a DISCOUNT bond
A
Accretion
16
Q
______ is the adjustment of a cost basis of a PREMIUM bond
A
Amortization
17
Q
Adding a sinking fund provision to muni bond issues helps the bond to receive a ______ rating
A
Higher
18
Q
If a secondary muni matures, even though secondary munis are subject to ordinary income tax, the cost basis is accredited to par, so there is ______ reported gain or loss on redemption
A
No
19
Q
______ bonds are redeemed
A
Muni
20
Q
MSRB governs the practices of ____ and _____ munis
A
Underwriting, trading
21
Q
If a sinking fund provision is added to a muni bond issued the bond will generally be issued with an interest rate _____ than without a sinking fund
A
Lower
22
Q
Bond buyer contains ____ and ____ bonds
A
GO, Revenue
23
Q
A bond can accrete or amortize 1 point of ORDINARY INCOME every ____
A
Year
24
Q
The National Public Finance Group and AMBAC insure _____
A
GO Bonds
25
Bond Buyer 20 only includes 20 _____ bonds
GO
26
If _____ securities fail you won’t always have immediate access to funds
Auction Rate Securities
27
T Notes mature in ______ years
T Bonds mature in _______ years
2-10
20-30
28
The term flow of funds refers to ______ bonds
Revenue
29
_______ bonds are quoted as a ________ of par
Dollar, Percentage
30
The Bond Buyer is a daily listing of available bonds to be offered in the next ________ days
30
31
Do Section 529 plans receive a prospectus or an official statement?
Official statement- they are legally muni fund securities
32
When a city needs short term cash flow to meet ordinary operating expenses, it issues ______
TANs
33
The Bond Buyer represents the dollar value of bonds _______ divided by bonds ______
Placed, offered
34
Under a net revenue pledge of municipalities funds, allocations should first go to _____ and _____
Operations, maintenance
35
A corporation with an outstanding convertible debenture issue could force conversion by publishing an announcement that the debenture holders have _____ days to _____ bonds at the call price
30, tender
36
Converting a convertible bond to common stocks is _______ taxable event. But when the stock is _____, the taxable event occurs
Not a, sold
37
An investor acquiring a corporate bond wants the safety of a _____ income investment along with potential _________
Fixed, capital appreciation
38
________ trust bonds are backed by a portfolio of other securities
Collateral
39
Because zero coupon bonds _________ interest on an annual basis, when the bond matures, there is NO capital gain or loss
Accrete
40
_______ are unsecured corporate debt
Debentures
41
______ bonds are primarily used when companies are undergoing a financial restructuring, usually after a bankruptcy filing.
Income bonds
42
Institutional communications don’t need prior ______ review if associated persons receive training in the firms procedures governing institutional communications
Principal
43
True or False: If you’re a general securities principal and you’ve been with the firm less than 6 months, according to advertising any retail material you approve must be pre-filed 10 business days prior to first used or post-filed within 10 business days of first use depending on the nature of the material
True
44
When it comes to correspondence, what makes it different than retail communications is that principal _____ may take place ______ or ______ sending the correspondence
Review, Before, after
45
Under OCC rules, if a communicational education piece that makes no projected performance figures or recommendations, it _______ preceded by an ODD doc
Does not need to be
46
Typical assets backing CMO’s include _______, _________, and ________ products
Ginnie Mae, Fannie Mae, Freddie Mac
47
Guarantees on insurance products must be specific to the insurance contract and not _______ investments
Associated
48
When there’s a TOD, _______ can change at any time, _______ is avoided, and percentage allocations can be changed at any time
Beneficiaries, probate,
49
Which corporation is where the tax and other consequences of the account do not accrue to the individual owners?
C Corp
50
If distributions do not begin by April 1 of the year after the individual turns 73, a _____% insufficient distribution penalty applies
25
51
If a company goes bankrupt, someone with a deferred comp plan becomes a ________
General creditor
52
For deferred comp plans, there’s no trust agreement and the employee simply agrees to a _____ rate of pay in exchange for a ______ at retirement
lower, promise
53
Any natural person, any age even a 8 yr old, can open a _______ if they have earned income
Roth IRA
54
The ONLY signature required for a customer’s new account form is the signature of the manager, or ______
Principal
55
______ brokers process transactions and provide back office and clearing support
Prime
56
A corporate profit sharing plan must be set up under a ____ because the trustee assumes fiduciary responsibility over the plan
Trust
57
If an employee of a member firm wants to open an account at another firm, you have to have written consent UNLESS you are purchasing shares of _______ or _____, or _______ plans
Mutual funds, variable annuities, 529
58
Defined benefit plans give the highest return to employees who are _______ compensated and have _____ years until retirement
Highly, fewer
59
What’s the latest date an IRA participant may make an IRA deposit for the current year?
April 15th of the FOLLOWING year
60
A large institution dealing with several different broker dealers would find it beneficial to open a _______ brokerage account
Prime
61
SEP IRA’s typically permit the ________ annual contributions
Highest
62
The E in ERISA stands for _____
Employee
63
______ plans are when the employer compares the price of the stock at the beginning of the purchase period and the end of the period and the purchase is discounted from the lower of the 2
Stock purchase plans
64
Qualified retirement plans are made with ______ dollars and distributions are ________
Pre-tax, taxable
65
The amount paid into a defined benefit contribution plan is set by the _______ agreement
Trust
66
Within a _____ account, the customer pays one fee that covers all transactions in an account
Fee-based
67
For Coverdell’s, funds must be distributed by the time they are ____ years old, or they are rolled over
30
68
In a ______ account, the account is frozen until a new or amended partnership agreement is reached
Partnership
69
If a Coverdell distribution exceeds educational expenses, a portion representing the earnings will be taxable to an additional ____%
10
70
Growth in qualified benefit plans/ pension plans are ____ deferred, not ______
Tax, tax free
71
ERISA protects employees in ____ sector’s only
Private
72
In a ______ plan, employer contributions can be reduced or skipped when earnings fall
Profit sharing
73
Early withdrawals from Traditional IRA’s are taxed as _________ + _____% penalty
Ordinary income, 10
74
A ______ trader BUYS and SELLS the SAME security on the same day four or more times in a 5 day period
Pattern day
75
Contributions to coverdell’s can’t be made past the students _______ bday
18th
76
True or False: Spousal IRA’s can be opened even if one spouse has little or no earned income as long as a joint tax return is filed
True
77
______ plans allow you to contribute _______% of earned income or the max allowable IRA limit, whichever is less
SIMPLE
78
All deductible contributions to a traditional IRA, as well as deferred earnings, are ________ at withdrawal
Taxable
79
Traditional IRA’s allow for tax-deductible ________ and _______ IRA’s do not
Contributions, ROTH
80
Distributions to retirement plans are ______ taxable
100%
81
______ are one shot clients that come in for something once and you’ll likely never hear from them again
Consumer
82
Changes in payments on a variable annuity correspond most closely to fluctuations in the value of ______ held in the separate account
Underlying securities
83
For non-qualified variable annuities, the growth portion is taxed as _________ and the growth portion is also subject to a _____% penalty
Ordinary income,
84
Variable annuities have an ______, which is an annual rate of return that is required to _____ the level of annuity payments
AIR (assumed interest rate), maintain
85
An ______ is a contract between an individual and a life insurance company
Annuity
86
________ have no SEC or FINRA max sales charge limit
Variable annuities
87
______ exchanges avoid any currency exchange costs
1035
88
Are variable annuities marginable?
No
89
The death benefit payable under a variable life insurance policy can be adjusted how often?
Annual basis
90
An individual purchased a variable life insurance policy, and they are entitled to a complete refund of all premiums paid if the request is made within ____ days from the execution of the application, or for _____ days from the time the owner receives the policy, whichever is longer
45, 10
91
The size of a leap contract is _____ shares
100
92
Strong dollar
Imports up
Exports down
93
Weak dollar
Imports down
Exports up
94
Yield based interest rate options are based on yields of _______ bills, notes, and bonds
Treasury
95
The OCC assigns exercise notices to member firms on a _______ basis
Random
96
Currency options settle in ________, not ________
US Dollars, Foreign Currency
97
The OCC guarantees all listed ______ contracts
Options
98
Index options exercise settlement in ______
Cash
99
An _______ transaction is used when establishing a new option position
Opening
100
If LEAP options positions are maintained for more than 12 months, the writer’s gains are taxed as ____ gains, and the buyers gains are taxed as ______ gains
Short-term, Long-term
101
Which index does the VIX track?
S&P 500
102
The VIX is the _____ index and trades on the ________
Fear, Chicago Board Options Exchange (CBOE)
103
European Style foreign currency options can only be exercised at ______ and can be traded ______
Expiration, any time
104
The writer of a combination expects _________
Stability
105
A customer should receive an ODD doc _____ or _____ the date of ________
Before, at, Account approval
106
An investor in long term, high quality bonds is at risk of ________ or _______ risk
Inflation, purchasing power
107
Zero coupon bonds do not expose investors to _______ risk
Reinvestment
108
When a portfolio is allocated to a conservative approach, it may be because one is anticipating a _______ market
Bearish
109
Preferred stocks are sensitive to ____ rate changes
Interest
110
You can eliminate _______ rate risk by holding bonds until ______
interest, They mature
111
Senior protection only happens when they are _____ or older
65
112
Tenders must be accepted or rejected within ____ days and open for at least ______
10, 20
113
FNMA allows for minimum denomination of $_______
1000
114
Which federal agency securities are exempt from all state and local taxation?
Farm home loan banks bonds (FHLB)
115
US Govt AGENCY issues typically carry higher returns than ______ issues bc of lack of government backing
Treasury
116
US Treasury notes are issued in maturities of 2,3,5,7,10 years
117
For every share, there’s a ______ that is offered
Right
118
Warrants are ______ term securities
Long
119
Stock prices in the OTC market are determined by ________
Negotiation
120
5% markup policy has to do with ______ transactions and principal _______ market trades
Agency, secondary
121
On a non-par preferred stock, the dividend is the ________
Stated rate
122
Warrants are typically issued along with debt instruments, enhancing the issuer to offer a slightly lower __________ rate
Interest
123
For Penny stocks, the firm has to wait _____ business days _____ SENDING the risk disclosure doc before executing the first penny stock trade
2, after
124
Callable preferred stocks pay the highest stated ________ rate
Dividend
125
When a company acquires outstanding stock, whether through open market purchase, or donation, this is known as as ____ stock
Treasury
126
ADR’s are used to facilitate the _______ trading of _______ securities
domestic, Foreign
127
Stocks and warrants both offer a holder an opportunity to buy a stock at a ______ price
Fixed
128
If an ADR shows $500 in dividends but the client notices only $425 credited to his account, this is because the difference represents a ______ tax
Foreign withholding
129
The issuer of an ADR is a ______ bank
Domestic
130
Intangible drilling costs generate the largest ____ year deductions in an oil and gas exploratory drilling program
Intangible
131
Only in _____ partnerships can no one lose more than their investment and proportionate amount
Limited
132
A working interest is a right to _____ from production, but also the responsibility for ______ costs
Revenues, extraction
133
Limited partners can’t pick assets for a partnership, but general partners _____
Can
134
In connection with a DPP _____, member firms may not solicit votes from limited partners unless the compensation is ____% or less
Roll up, 2%•
135
Intangible drilling costs include land _______, wages, and _____
Surveys, fuel
136
One of the key requirements in offering a DPP is that the investor has a net worth sufficient to sustain the risks of the ________, including ______ of investment
DPP, loss
137
Dividends from REIT’s are taxed as _______
Ordinary income
138
DPP’s are not suitable for someone near ______ age
Retirement
139
The type of REIT that purchases real estate properties that produce income as well as mortgages on income-producing real estate properties?
Hybrid REIT
140
Depletion allowances in oil and gas programs are based on the amount of oil that was _______
Sold
141
DPP _______ can increase the liquidity of an existing program
Rollups
142
Which tranche is the most volatile?
Z tranche
143
PACs can reduce, but not eliminate ______ risk for tranche holders
Prepayment
144
Hedge funds limit the participation max to _____ investors because it avoids the need to register with the SEC
100
145
CMO’s pay interest how often?
Monthly
146
Because hedge funds are not registered with the SEC, they do not have to provide the same level of ________
Transparency
147
A ______ period means that liquidation of funds are prohibited during that time frame
Lockup
148
Asset backed securities are backed by a contractual obligation to _____
Pay
149
When a member firm receives a written complaint against one of its reps, the first person informed about this is the ________
Designated principal
150
Changes to form U4 regarding statutory disqualification must be made within ________ business days
10
151
The simplified arbitration process gives disputants a binding decision within ______ days from a single public arbitrator
30
152
_______ are arbitrators that worked in the financial industry at any duration during their career
Non Public arbitrators
153
If you want to appeal a Code of Procedure decision, you have to appeal within ______ days of the decision date
25
154
If a member wants to have a clearly erroneous trade adjusted or nullified, they have to notify NASDAQ within ________ mins of the execution
30
155
Simplified arbitration includes small disputes under $_________
50,000
156
Info required to be submitted on form U4 includes ______ years of residency and ____ years of employment history
5, 10
157
Under the code of arbitration, a respondent has _____ days to respond to both the director and the claimant
45
158
Statute of limitations is ____ years from the date of the event
6
159
Record keeping requirements require ____ years for FINRA and _____ years for the SEC
4, 3
160
Call provisions of a muni issue would be detailed completely in the _________
Bond resolution
161
Long straddles expect
Volatility
162
Short straddles expect
Stability
163
Covered puts expect
Volatility
164
Covered calls expect
Stability
165
Shorting can only be done in _____ accounts
Margin
166
Accretion or amortization on _____ issues are not ______
Original, taxed
167
The price of ______ is determined by supply and demand
CEF’s
168
Lock-up period means a time in which liquidation is _______ by the fund
Prohibited
169
Investing the same amount on a regular basis is also known as ________
Dollar cost averaging
170
____ spreads are considered neutral strategies
Time
171
Flow of funds is not found in the official statement, but in the _______
Bond contract
172
Target date funds help to eliminate _____ risk because they adjust _______ allocation
Investment, asset
173
To protect a gain, you should place a _______ order
Buy stop
174
Debt refunding _____ interest costs
Reduces
175
A DPP Crossover point means that the general partners have _____ income while the limited partners have ______ income
Earned, passive
176
Losses from DPP’s can offset income from _______
Limited partnerships
177
Position trading means _____ for your own account
Trading
178
FINRA member syndication or finder’s fees are limited to what percentage of the gross dollar amount of the limited partnership interests sold?
10%
179
A tool used by investing banking firms to combine several unsuccessful Limited partnership programs into one new entity is a ______
DPP Rollup
180
Equity REIT’s earn _____ income from leasing properties they own
Rental
181
Equity REIT’s receive interest income from ___ they own, and Mortgage REIT’s receive interest income from _____ they own
Properties, mortgages
182
Dividends from _____ are taxed as ordinary income
REIT’s
183
DPP’s have a lack of _______
Liquidity
184
A price paid for a listed REIT is most similar to the pricing of a _____
CEF
185
When a REIT does not have a quote, it is ______
Untraded
186
Are hedge funds registered with the SEC?
No
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
