Question1: Which of the following statements is pertinent to closed-end investment companies?
Question2: How many days after the settlement date must a broker/dealer "buy in" a customer who has failed to deliver securities?
Question3: Bubba owns stock with cumulative voting rights. There are five vacancies on a board and he owns 100 shares of stock. Bubba is entitled to cast the following votes:
Question4: The registration requirements of the federal securities acts are intended to protect the public interest by providing for a prospectus on new issues and its review by the SEC.
Which of the following is the true of this process?
Question5: In the offering of new securities, members of the syndicate are permitted to sell to other dealers less the reallowance. The amount of the reallowance is determined by:
Question6: What rate of return takes into consideration appreciation or depreciation in market value relating to the par value of a debt security?
Question7: Under Rule 415 a corporation may file a single registration statement with the SEC covering its anticipated financing need for the next:
Question8: The price an investor pays for a listed option is called the
Question9: Bubba buys a municipal bond at a discount and holds it to maturity.
Which of the following is true?
Question10: The agreement between the members of a syndicate and the manager is known as the:
Question11: When an index option is exercised, settlement is made by:
Question12: Book value of a corporation is also known as:
Question13: Which of the following registered investment companies normally sells with an appropriate commission added to the contract price?
Question14: Which of the following does not appear in a municipal syndicate letter to underwriters?
Question15: Which of the following does not decrease basis?
Question16: What is the term applied to a classification of CMO securities having a stated maturity, average life, and estimated yield?
Question17: Which of the following is true about option prices?
Question18: The initial Federal Reserve Bank margin requirement is set at 60% and Bubba purchases 100 shares of XYZ at $100 per share. He deposits $6,000 of the $10,000 purchase price in his account.
If XYZ increases in value to $150 per share, how much excess equity would Bubba have in his account?
Question19: In a securities underwriting a participating firm is said to be liable severally but not jointly.
What is this type of underwriting is called?
Question20: In mid-September, Bubba sells one XYZ February 50 call at $6. It subsequently expires without being exercised.
How is the premium taxed?
Question21: Initial margin deposit minimum requirements are set by the:
Question22: Which of the following securities has the highest amount of market risk?
Question23: Which of the following pairs of corporation characteristics are easiest for a partnership to avoid?
Question24: When the market value in a long margin account decreases, the SMA will:
Question25: The maximum contribution an employer may make to a SEP-IRA is:
Question26: Under which of the following was SIPC established?
Question27: A typical money market instrument carries which of the following?
Question28: Revenue bonds are least likely to provide constructions funds for:
Question29: Which of the following may occasionally be purchased at a discount from net assets value?
Question30: Which of the following types of investment companies pays out 90% of its net investment income to shareholders?
Question31: A call option is in the money when the market value of the underlying stock is:
Question32: In which of the following is not a case where a deed to a condominium qualifies as a security?
Question33: Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
What is the buying power in Bubba's account?
Question34: Bubba Corporation has a registered public offering of 500,000 shares at $36. Of these, 300,000 shares were authorized by unissued and 200,000 shares were sold on behalf of an affiliated person.
What is evident from this information?
Question35: Who owns a corporation?
Question36: Upon opening a new account for a customer, a registered representative should:
Question37: Bubba buys a US treasury bond. The interest he earns is:
Question38: Bubba is a registered representative who wishes to buy shares of a new issue his firm is distributing.
Under FINRA Conduct Rules, Bubba may:
Question39: The Bubba Insurance Company is not incorporated. It consists of Bubba and his two brothers as general partners, who maintain an active securities account in the name of the company. If one of the partners should suddenly die, what course of actions should be undertaken by the registered representative at the brokerage?
Question40: Who is responsible for verifying that limited partners meet net worth and income requirements?
Question41: Which of the following persons would consider annual reports of a corporation as the most important factor in making investment decisions?
Question42: An ERISA benefits plan qualified under Section 401(a) of the Internal Revenue Code may:
Question43: Bubba sells 100 shares of XYZ short at $58 and buys 1 XYZ Mar 60 Call at $3.
What is the customer's maximum loss?
Question44: Which of the following does not issue debt securities that trade in the open market?
Question45: Bubba and his wife, Bubbette, maintain a joint account with a brokerage firm as "joint tenants in common".
Bubbette calls a registered representative at the brokerage and places an order to sell 100 shares of XYZ, which is long in the account.
Which of the following statements is correct about this order?
Question46: Bubba Corporation has net income of $4,200,000. It has 100,000 outstanding shares of 8% preferred stock ($100 par value) and 400,000 shares of common stock ($10 par value).
What are the earnings per share of common stock?
Question47: Which of the following is not an intangible drilling cost?
Question48: Convertible bonds have all of the following features except:
Question49: What type of security is quoted with a bid price of 4.72 and an asking price of 4.68?
Question50: A registered representative privately assures a customer that a certain stock will double within 18 months.
During this period the stock the stock performs as predicted.
Which of the following statements is true?
Question51: When depositors withdraw money from savings institutions to invest in US treasury securities, this is called:
Question52: In regard to discretionary accounts, which of the following statements is correct?
Question53: In early September, Bubba buys 100 shares of XYZ for $83 per share and simultaneously writes one XYZ March 90 call for $4.
What is the price for XYZ stock at which Bubba will breakeven?
Question54: A short sale can be made in which of the following types of accounts?
Question55: At the time it underlying stock is trading at 48, Bubba buys a listed call option with a $50 strike price for
$300. At what minimum price must that stock trade for Bubba to recover his investment (ignoring commission and taxes)?
Question56: The FINRA Conduct Rules permit a transaction made "seller's option" to be delivered earlier than the expiration of the contract if:
Question57: Which of the information below does not appear in the official notice of sale?
Question58: Which of the following is normally the largest asset of a manufacturing company?
Question59: Which of the following statements regarding mutual funds is true?
Question60: For what time period does a Form 144 remain in effect?
Question61: Bubba has several accounts at a brokerage firm. Which of the following is not covered by SIPC?
Question62: Bubba opens an account at a broker/dealer with instructions to "transfer and ship". This means that:
Question63: The amount for which the securities of a close-end investment company are selling above net asset value is know as:
Question64: A front-end loan mutual fund plan is most suitable for:
Question65: Mutual fund salespersons may not represent that a product is like of safer than:
Question66: An offering price of 102 plus accrued interest applies to which of the following securities?
Question67: Bubba has not existing positions in his account and writes 1 XYZ July 60 put and 1 XYZ July 60 call.
What is this position called?
Question68: The term "secondary market" refers to:
Question69: Which of the following forms of underwriting is least likely for an offering of municipal bonds?
Question70: Under the Investment Company Act of 1940, what is the minimum net worth of a registered investment company?
Question71: Bubba buys a municipal bond at 102 and holds it ten years to maturity.
For tax purposes, how is that premium treated?
Question72: A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering.
What subscription ratio is the corporation establishing for each new share?
Question73: An excerpt from a recent tombstone ad reveals bonds offered publicly at 101.
Why were they priced at a premium?
Question74: The general purpose of the Securities Act of 1933 is to:
Question75: Municipalities are most likely to issue notes for which of the following purposes?
Question76: Smart Company, Inc., has cash it intends to use in six months for purchase of equipment. The most prudent investment during the six-month period is:
Question77: Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500.
What is the equity in Bubba's account?
Question78: Bubba is opening a margin account with a member organization. He wishes to purchase 100 shares of XYZ at $15 per share.
What is Bubba's initial cash deposit?
Question79: A corporate bond is quoted as having a net change in value of plus one point.
By how much did the bond price increase?
Question80: What percentage of maintenance charges and debt service are covered by the rate covenant of a revenue bond issued to finance a municipal toll road?
Question81: Which of the following is not an investment company within the terms of the Investment Company Act of
1940?
Question82: Which of the following is not true about US treasury bills?
Question83: Convertible preferred stock has all of the following characteristics except:
Question84: Call loans made by banks to broker/dealers are generally for the purpose of which of the following?
Question85: Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
Bubba wants to buy 100 shares of DUM at $30 per share and 100 shares of OUT at $120. How much how much value of additional securities must Bubba deposit in lieu of depositing cash?
Question86: Which of the following price quotes is representative of a treasury bill?
Question87: In a monthly review of customer statements, Bubba notices that one of his firm's clients has paid for seven purchases five days late.
What does he do?
Question88: A trust instrument drawn pursuant to the Trust Indenture Act of 1939 sets forth which of the following?
Question89: If a municipality has funds available to make a partial call of an issue of outstanding serial bonds, which bonds should be called first?
Question90: Which of the following stock exchanges is not registered with the SEC?
Question91: The Bubba Corporation is offering stock to the public for the first time. The registration statement lists
150,000 shares for sale at $400 per share. The company conducts business in a 100-mile radius that includes towns in two neighboring states.
Which of the following information is not required in the preliminary prospectus for this offering?
Question92: Which of the following does not appear in the official notice of sale?
Question93: Bubba owns a perpetual warrant to buy one share of Internet Corporation common stock at $30. Internet Corporation stock is trading at 41.50 and is ex-dividend today at $0.75.
What is the market value of Bubba's warrant?
Question94: The Bubba Fund is a load mutual fund that offers a reinvestment plan.
What does this mean?
Question95: Which of the following would be least useful to an analyst making a technical market report?
Question96: Which of the following municipal securities carries the full faith and credit of the US government for payment of interest and principal if the issuer's funds are insufficient?
Question97: Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
What is Bubba's excess equity in the account?
Question98: Which of the following is not prohibited of a general partner?
Question99: If the Federal Reserve wished to ease credit, which of the following steps would it take?
Question100: A basis point is:
Question101: Reinvestment of dividends and distributions from investment company shares:
Question102: Bubba buys "double-barreled" municipal bonds. What is the source of guaranteed repayment on these bonds?
Question103: Which of the following option positions is indicative of the same class of option?
Question104: A mutual fund with an 8% load and a 1% redemption fee carries a current quote of $6.25 - $6.79. If an investor has tendered his shares for redemption on that basis, the per share price he will receive is approximately:
Question105: Bubba entered an order to sell long 100 shares of XYZ at 38.75 stop limit. Thereafter, the following round- lot transactions occurred: 38.75, 38.65, 38.50.
At what price was Bubba's order executed?
Question106: A wealth investor gives Bubba discretion to invest $50,000 for him in any way Bubba sees fit. Therefore, Bubba must:
Question107: Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points.
Which of the following orders would be the best recommendation?
Question108: A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering.
How many rights will the corporation distribute to its shareholders?
Question109: Under which of the following conditions may a registered representative of a firm that is an underwriter of a new offering of common stock send to a client a copy of the firm's research report on that stock?
Question110: Limited partnerships try to avoid recapture because:
Question111: Bubba sells short 100 XYZ at $60 and makes the required Regulation T deposit of 50%. XYZ then rises I price to $65.
At this point what is the credit balance?
Question112: Under what conditions may an FINRA member firm sell an IPO to an employee of another broker/dealer?
Question113: Who obtains and pays the municipal bond attorney rendering a legal opinion about the validity of the bond issue?
Question114: Which of the following is not found in the final prospectus?
Question115: Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85 . What is the nominal yield?
Question116: A buy-in of a customer's sale transaction is mandated if the securities have not been received by the broker/dealer within how many business days following the settlement date:
Question117: Which of the following has the greatest risk?
Question118: What is represented by the net investment income of an open-end investment company?
Question119: Which of the following have a stated interest rate on the face of the certificates?
Question120: When the Federal Reserve lowers reserve requirements, what is it attempting to do?
Question121: Which of the following is not in the subscription agreement for a limited partnership offering?
Question122: Prospective bidders for a municipal bond being issued should consult what document for relevant procedures?
Question123: Which of the following statements incorrectly describes US securities markets?
Question124: An issuer is most likely to request an investment letter from the purchaser in connection with which of the offerings?
Question125: In stabilizing a new issue, the manager may make a "syndicate penalty bid". This means that:
Question126: On which of the following is depreciation permitted?
Question127: A 5% markup policy applies to:
Question128: Which of the following sources provides news of prospective municipal securities sales to underwriters?
Question129: Which of the following options positions is characteristic of a short straddle?
Question130: All sales literature and advertising relating to investment company shares prepared by members of FINRA must be filed for review with which of the following?
Question131: Bubba buys $100,000 of US Treasury 10½ s of 31 on margin. If the current market price is 92.16, what is Bubba's minimum deposit requirement?
Question132: Bubba wants to buy 500 shares of an NYSE listed stock at 38.87 but he wants to buy at one time, right away, or else forget it.
What kind of order should the registered representative enter?
Question133: Which of the following oil and gas programs does not directly involve drilling?
Question134: Distribution from an IRA can begin at age 59½ and must begin by age:
Question135: Which of the following best describes depreciation?
Question136: An "accumulation unit" of a variable annuity is used to determine which of the following?
Question137: Bubba buys one XYZ September 50 call at $7 and sells one XYZ September 60 call at $3. At that time, XYZ stock is at $55. Bubba has no other stock positions. At what must XYZ trade for Bubba to break even?
Question138: A case of leverage is:
Question139: In a firm commitment offering, any shares that are not sold are:
Question140: Which securities do not receive dividends?
Question141: Bubba buys one XYZ June 40 call for $1,000 and sells one XYZ March 40 call for $600. Subsequently, the June call is closed for $1,200 and the March call for $900.
What is Bubba's net result?
Question142: The cost of maintaining an investment in a mutual fund is best reflected in the:
Question143: A four-letter symbol assigned to an issue is characteristic of an equity security that is:
Question144: Bubba Corporation has a registered public offering of 750,000 shares at $40. An underwriter of 30,000 shares is advised by the manager that its retention will be 70%.
How many shares may the underwriter sell to its own customers?
Question145: Bubba buys a $4 convertible preferred with a $50 par value that is exchangeable for common stock at
47.50. If the preferred stock is trading at 52 and the common stock at 51, Bubba determines that the preferred stock is:
Question146: Which of the following sets of prices is that of a closed-end investment company?
Question147: With respect to the public offering of securities by an underwriting syndicate, which of the following is true?
Question148: Which of the following best describes phantom income?
Question149: Which of the following does not describe an underwriting procedure?
Question150: Bubba Brokerage Corporation announces through its wire system that it has a large block of stock for sale.
Customers purchasing the stock will not pay a commission. The block is crossed on the NYSE floor and is printed on the NYSE tape. This is called a:
Question151: How much currency is one mil worth?
Question152: Bubba is long spot Canadian dollars at 0.7400. If he wants to buy one put option on Canadian dollars with a strike price of 74 and a cost of $0.35, what is Bubba's breakeven price for Canadian dollars?
Question153: In terms of depletion, percentage depletion is better than cost depletion because it:
Question154: When a corporation issues a nonconvertible debenture, what is the effect upon its net worth?
Question155: Bubba has a short margin account with equity of $15,000 and a credit balance of $28,000.
What is th e current NYSE minimum equity maintenance requirement on Bubba's account?
Question156: In the sale of open-end investment company shares, the amount at which the sales charge is reduced on quantity transactions is referred to as the:
Question157: Bubba buys one XYZ November 65 call at $3 and one XYZ November 65 put at $2. XYZ is trading at $72.
The put expires and the call is closed at its intrinsic value.
What is the resulting profit?
Question158: Which of the following is a right for shareholders of common stock?
Question159: Registration of open-end investment company shares with the SEC implies that the:
Question160: An advertisement for a CMO security by a member of FINRA should disclose which of the following?
Question161: Bubba buys a 5% bond that matures in 15 years with a 5.10 basis. How much did he pay for the bond?
Question162: Which of the following securities provides the longest term of option privilege?
Question163: Bubba buys one XYZ September 50 call at $7 and sells one XYZ September 60 call at $3. At that time, XYZ stock is at $55. Bubba has no other stock positions.
What is Bubba's maximum possible profit?
Question164: The accounting statement that represents a company's financial position on a particular date is the:
Question165: Bubba Corporation has a profit sharing plan. The company president, Bubba, is receiving the maximum plan contribution amount. The corporation has one other employee, who is eligible for the plan.
If this person earns $12,000 per year, how much must be deposited in the plan for the employee?
Question166: Bubba's pledge to purchase a specified dollar amount of a mutual fund within a specified period of time is called:
Question167: Under which of the following conditions are homeowners most likely to refinance existing mortgages?
Question168: Under an initial federal requirement of 70% equity, Bubba purchases 100 shares of XYZ at $40 per share and wishes to satisfy the margin call by delivering another listed security into his account.
He may do so by depositing stocks with a market value of:
Question169: Bubba is concerned about the liquidity of a possible municipal bond purchase. He is therefore probably most interested in the rating supplied by which of the following?
Question170: Bubba is buying a treasury bill. The discount he receives results in Bubba's determination of:
Question171: Which of the following is the least important method of money control exercised by the Federal Reserve?
Question172: Which of the following holders of unregistered stock is precluded from selling shares under Rule 144?
Question173: Municipal syndicate allocation procedures are described in which of the following?
Question174: What percentage load is associated with a mutual fund quoted 16.60-18.04?
Question175: Which of the following would not normally be a function of an investment banker?
Question176: Which of the following is true of treasury stock?
Question177: In the distribution of a new issue, a dealer acting as an underwriter is said to have a:
Question178: Under Regulation T, when must money be deposited to cover requirements for Bubba's new purchases on margin?
Question179: What is the importance of the "at risk" rule?
Question180: The net investment income of an open-end investment company represents:
Question181: Which of the following pays interest at maturity only?
Question182: In a 401(k) plan, when are employee's contributions of compensation deferral vested?
Question183: Bubba purchases 100 shares of XYZ at 78 and, on the same day, writes 1 XYZ October 80 call for a premium of 4. If the option expires unexercised, what is Bubba's profit on the 100 shares of stock?
Question184: Which of the following will not result in termination of a limited partnership?
Question185: A management group may serve an investment company as its:
Question186: Interest rates rise from 5.10% to 5.30%. For a prospective buyer of five $1,000 bonds, what is the increase in interest payments as a result of the rise?
Question187: If recaptured deductions are added to income, recaptured investment tax credits are added to:
Question188: For an FINRA member firm to exercise discretionary power in any customer account requires written authorization by that customer except when:
Question189: Bubba wants to buy a US treasury bond with a bid of 97.28 and an asking of 98.2.
How were these prices established?
Question190: Which of the following must be true in order for an offering to qualify as an intrastate offering under Rule
147?
Question191: Bubba's order to purchase investment company shares must be executed at a price based upon the net asset value of the shares:
Question192: In considering the fairness of a firm's markup, the FINRA considers:
Question193: Which of the following is not true about mutual funds and variable annuities?
Question194: A syndicate manager has just been informed that its bid has been accepted and all syndicate members are duly notified. Public information on the award will be most quickly available from:
Question195: The expiration date of a listed option is:
Question196: Bubba wishes to invest $50,000 in three mutual funds offered by different underwriters with growth as the main objective. A recommendation to purchase only one such fund for $50,000 might be more suitable to Bubba if:
Question197: Which of the following statements about the custodian for an open-end mutual fund is correct?
Question198: According to FINRA Conduct Rules, a party judged guilty of a rule infraction by the District Business Conduct Committee may then appeal to:
Question199: In order to determine the amount of estate tax due, if any, the assets of a decedent's estate are valued as of the date of death. A second evaluation is then made:
Question200: Which of the following statements is not true about exchange traded options?
Question201: When a member firm buys or sells securities directly as principal with a public customer, it is acting as:
Question202: An investment company incapable of issuing a long-term debt instrument is:
Question203: Which of the following has the least active secondary market?
Question204: What Federal Reserve Board regulation governs the extension of securities-related credit by banks?
Question205: Which of the following items is not deducted to determine a corporation's net income?
Question206: Smart Guys Securities Corporation has given a workable bid to Better Guys Securities Corporation. If market conditions change, Smart Guys may:
Question207: FINRA advertising standards permit a dealer to state that a CMO has an implied AAA rating if the securities are issued:
Question208: Which of the following are direct obligations of the US government?
Question209: An employer profit sharing plan may be described as:
Question210: Which of the following clients could not open a margin account?
Question211: An investment company acting as a conduit in the distribution of net investment income, pursuant to IRS rules, is called:
Question212: Bubba held one XYZ July 30 listed call option when XYZ split 2 for 1.
What is the resulting position, Bubba has on the Option Clearing Corporation's record?
Question213: Which of the following activities by a limited partner may subject the partner to unlimited liability?
Question214: In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600.
If the option expires without being exercised, how is the premium expense treated by Bubba?
Question215: In a corporation's financial statements, earned surplus is also recognized as:
Question216: What is the possible reward for investing in raw land?
Question217: Bubba is eligible for a Roth IRA. He may convert his SEP-IRA to a Roth IRA:
Question218: Assuming all of the following bonds from the same issuer are callable now, which one would most likely get called first?
Question219: After an extended period of backing and filling, a stock moves up sharply through a resistance level on heavy volume. A technical analyst would likely call this a:
Question220: Under a leaseback arrangement used to finance construction of local schools, who is the issuer of the municipal bonds?
Question221: Which of the following is not a marketable security?
Question222: Which of the following municipal bonds may be grouped under the classification of "revenue bonds"?
Question223: Bubba buys municipal bonds with a $100,000 principal amount at 89 on margin. His account has no cash or securities.
What is his minimum required deposit?
Question224: Level III of NASDAQ provides which of the following?
Question225: When a corporation dissolves, who gets paid first?
Question226: Which of the following is not an attribute of US treasury bills?
Question227: The market theory stating that the small investor is usually wrong is called the:
Question228: A dealer buys 100 shares of XYZ common, which is an actively traded stock, at 23.50. Three days later, when XYZ common is quoted at 19.50 - 19.75, he sells the 100 shares to a customer.
The basis for the dealer's markup is:
Question229: Bubba buys 100 shares of XYZ stock at $40 per share and sells a listed July XYZ call at 45 for a $2 premium.
What is his loss potential?
Question230: Creditors whose claims are not settled upon dissolution of a limited partnership may seek recourse from:
Question231: A company may pay a declared dividend in which of the following ways:
Question232: Which of the following are sources of funding for limited partnerships?
Question233: Although a corporation has no earnings in a particular year, it is obligated to pay interest on all its outstanding debt except the following:
Question234: Under what circumstances may a registered investment company change its investment objective?
Question235: The gross spread in a new issue depends upon which of the following?
Question236: Most publicly owned securities are:
Question237: A leveraged company is best described as one that has a small portion of its capitalization represented by:
Question238: The practice of positioning stock in response to a customer's order and immediately after marking it up for resale to the customer is:
Question239: Bubba buys a bond issued at par with a 5% coupon that is convertible into common stock at $40.
What conversion ratio does Bubba determine?
Question240: Regulation A permits a short form of filing for offerings of new securities provided the total amount of the offering does not exceed:
Question241: The Securities Act of 1933 provides for:
Question242: Bubba owns a subordinated debenture in a company that is liquidating.
When will he get paid?
Question243: In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600. In April, Bubba exercises the put option and uses his stock for delivery.
What is his resulting tax consequence?
Question244: Which bond buyer index reflects the lowest average yield for municipal bonds?
Question245: Which of the following is considered a firm quotation in the over-the-counter market?
Question246: Which of the following statements about mutual fund fees is accurate?
Question247: Bubba owns 200 shares of XYZ at $90, and wishes to hedge the position while generating income.
What is the best recommendation?
Question248: Bubba wants to buy a $4 convertible preferred with that has a $50 par value and is exchangeable for common stock at $47.50. If the preferred stock is trading at 52, what does Bubba calculate as the common stock price in order to be at parity with the preferred?
Question249: Crossover is best defined as:
Question250: Which of the following organizations usually has a prominent role in guiding investment policies of mutual funds?
Question251: Provisions of SEC Rule 145 normally apply to an exchange of one security for another as a result of:
Question252: The definition of debentures is:
Question253: Which of the following best describes depreciation?
Question254: Bubba decides to buy equity securities. Which of the following statements is always true about what Bubba is buying?
Question255: Which of the following is least relevant in evaluating the safety of a general obligation bond?
Question256: In what broad category of municipal bonds are "limited tax" bonds placed?
Question257: Which of the following is associated with an income oil and gas partnership?
Question258: The most common type of bond issued by a well-established company is:
Question259: The net asset value of a mutual fund was $9.72 last month. This month it is calculated at $9.85.
What is the change in value called?
Question260: Which of the following is available both to owners of stock and owners of limited partnership participations?
Question261: What is the name for the rate of discount from the list price that is paid to a municipal securities underwriting group member for its sales participation?
Question262: Partnership democracy is:
Question263: In a triple net lease, which of the following is the tenant not responsible for paying?
Question264: If a customer dies, the registered representative is required to:
Question265: How much money is a concession of 3/8 worth for one municipal bond?
Question266: As a general rule, when a partnership is terminated, in what order are assets distributed?
Question267: A NYSE floor member executing an order for a public customer asks the specialist in the stock to guarantee a price while giving the customer an opportunity to obtain a better price. This procedure is known as:
Question268: A stock with a current P/E of 17 is selling at $74.50 per share.
What are the company's earnings in the trailing 12 months?
Question269: Which of the following does not affect the public offering price of a new issue?
Question270: A bank or trust company that is acting as custodian for a mutual fund does which of the following?
Question271: To accommodate a customer's order to buy an over-the-counter stock, a broker/dealer is permitted to:
Question272: XYZ Corporation earned $2 per share last year and is selling at $20 per share. If it earns $3 per share this year and its price/earnings ratio stays the same, its price will be:
Question273: What does the following mean when printed on the stock exchange ticker tape?
Question274: When pricing callable municipal bonds, the "price to call" is based upon which of the following?
Question275: A financial institution requesting a quote on a block of 100 bonds from a dealer in government securities receives a quote of 98.02 bid, 98.06 asked.
What is the dollar amount the institution will receive if the financial institution sells these bonds to the dealer?''
Question276: An option that permits the holder to exercise the contract only at expiration is referred to as:
Question277: Which of the following are not flat rate taxes?
Question278: The term "mutual fund" is popularly used for which of the following?
Question279: Which of the following is not a practice of a mutual fund custodian?
Question280: Bonds are most often quoted as a percentage of:
Question281: Which of the following is not provided for by Blue Sky laws?
Question282: Bubba Securities, Inc. offers 3,000,000 shares of Top Notch Manufacturing Corporation common stock at
$27 per share. The next day an advertisement appears in the Wall Street Journal announcing the offering and listing the names of some of the underwriting firms.
This ad is commonly referred to as a:
Question283: What expression is used to describe the application of income and revenues derived from the operation of a facility financed from proceeds of a revenue bond?
Question284: What type of mutual fund would invest in equities and bonds?
Question285: Bubba's margin account has $2,000 of SMA. If he buys $10,000 of new securities, how much additional cash must he deposit assuming a Reg T requirement of 50%?
Question286: A revenue bond is issued by a state agency. The state legislature is granted authority to apportion money to support the debt services if necessary, but is not legally obligated to do so.
What type of bond is this?
Question287: Big Guns Municipal Bond Dealer Corporation buys 100M of 7% 20-year GO bonds at par. The bonds are marked up and immediately re-offered for sale.
Which of the following re-offering prices would probably be deemed excessive?
Question288: In a best efforts distribution of a new non-exempt issue, a broker/dealer:
Question289: An investor purchasing a corporate bond regular way will have to pay the contracted price plus accrued interest:
Question290: A registered representative is given a limited trading authorization by a client. This permits the representative to:
Question291: Which of the following is not good delivery on a sale of 470 shares?
Question292: Bubba Corporation issued bonds that pay interest on January 15 and July 15 each year until maturity. An investor purchasing these bonds on Monday, April 12, must pay the contract price plus accrued interest for:
Question293: Which of the following is identified as a funded debt instrument?
Question294: Bubba maintains an individual cash account as well as a joint account with his wife, Bubbette. While Bubba is out of town on a fishing trip, Bubbette calls the brokerage firm with an order to buy 100 shares of Great Company, Inc., at the market value for Bubba individual account. It is a stock Bubba has previously informed the brokerage he wanted to buy at the "right price".
What does the brokerage do?
Question295: Which of the following receives the highest priority of a municipal bond trustee when applying income and revenue derived from a financed toll facility?
Question296: In which of the following situations may exemption from compliance with Regulation T be granted?
Question297: Under Regulation T of the Federal Reserve, when may a broker overlook an amount due in a customer's account?
Question298: Which are the primary considerations in evaluating the worth of a limited partnership?
Question299: For a self-employed individual's retirement plan, ERISA permits an investment in which of the following?
Question300: Hypothecation usually refers to which of the following?
Question301: Which of the following is not a characteristic of treasury bills?
Question302: In a competitive bidding for mortgage bonds of a large public utility the winning underwriter is determined by:
Question303: The FINRA markup policy applies to:
Question304: Which of the following securities is traded only in the over-the-counter market?
Question305: Which of the following would not be subject to the holding period restrictions under Rule 144?
Question306: Which of the following preferred issues is likely to fluctuate most in value?
Question307: Maintaining a fair and orderly market and acting as a broker's broker are dual functions of the:
Question308: A limit order is best describes as an order:
Question309: CMOs are sold and priced based upon which of the following:
Question310: Which of the following is true about a customer with a frozen account?
Question311: Bubba want to buy a CMO. In general, how often should he expect to receive interest payments?
Question312: Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500.
What is the NYSE minimum equity maintenance for this account?
Question313: Commercial paper is typically issued with a maturity date not exceeding:
Question314: Big Easy Investment Banking, Inc., is participating in an Eastern account underwriting of $10 million of municipal bonds by agreeing to underwrite 10% of the issue. One week later, $4 million remains unsold but Big Easy has distributed $1.5 million of bonds.
What is the liability of Big Easy remaining in the account?
Question315: Bubba is buying a Federal Home Loan Bank issue that is offered at 95.22.
How much will he pay to purchase one bond?
Question316: Under what circumstances may a municipal securities dealer guarantee a customer against loss in market value of bonds?
Question317: Which of the following rights does an ADR holder not have?
Question318: Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
Bubba wants to buy 100 shares of DUM at $30 per share and 100 shares of OUT at $120. How much additional money must be deposited?
Question319: A registered bond with "Happy Birthday" scrawled across the face of the certificate is delivered to a broker/ dealer in satisfaction of sale by another member firm. Assuming it is accompanied by an authentic assignment, power of substitution form, and tax stamps (if appropriate), this is good delivery only if:
Question320: The Bubba Corporation has 900,000 of common outstanding and holds 100,000 shares as treasury stock.
At the end of the third quarter $450,000 is distributed as a dividend on the common.
How much is the dividend per share?
Question321: The return by the receiving party of securities previously accepted for delivery or a demand by the delivering party for return of securities that have been delivered is called:
Question322: Bubba Corporation owes income tax. Which of the following may be tendered at par value for payment of the tax?
Question323: Bubba buys a bond issued at par with a 5% coupon that is convertible into common stock at $40. The bond increases in value by 20 points.
What is the conversion parity of the stock?
Question324: Customers who engage in increased activity of wiring money from their account could indicate which of the following activities?
Question325: Bubba's margin account has securities valued at $20,000 and an $8,000 credit balance.
What is the equity in Bubba's account?
Question326: Which of the following sets out the details for the management board of condominiums, including the board's powers and limitations?
Question327: Which of the following is an acceptable deposit to answer an NYSE maintenance call?
Question328: Assuming that the information contained in a registration statement is complete and accurate, the registration statement becomes effective:
Question329: A registered representative just accepted Bubba's instructions to buy a specific stock in the over-the- counter market with the credit balance in his account.
Which of these orders for that issue can be entered and executed on a single ticket in a typical broker/ dealer organization?
Question330: Bubba has a cash account and fails to make full and prompt payment for a purchase. The broker liquidated the transaction. Two weeks later, Bubba places another buy order for 100 shares of XYZ.
What does the broker do?
Question331: When does a call option provide the most value to its holder?
Question332: How often must Investment companies issue financial statements to shareholders?
Question333: In the distribution of a new issue underwriters or selling group member are prohibited from:
Question334: A company earns $6 per share and pays out 20% in common stock dividends.
What does the stock yield if it sells at $30 per share?
Question335: What is the loan value on a call option held in a customer's margin account?
Question336: Under the terms of the 1970 Securities Investor Protection Act, what is the status of a customer whose account assets exceed SIPC insurance coverage when his broker/dealer becomes insolvent?
Question337: A large manufacturing company has current assets of approximately $9,400,000 and current liabilities of about $4,900,000.
Which of the following statements is true about the current ratio?
Question338: Bubba buys an OTC stock from a firm that is a market -maker in the stock.
What may be said about the price he pays?
Question339: Which of the following pairs of terms are synonyms in connection with most mutual funds?
Question340: Feasibility studies and engineering surveys are most necessary prior to which of the following new offerings?
Question341: Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
If Bubba wants to buy 100 shares of DUM at $30 per share, how much additional money must be deposited?
Question342: What does the bond buyer placement ratio represent?
Question343: Which of the following is not true about brokerage accounts?
Question344: Bubba Corporation has 3,500,000 shares of common stock outstanding and its trading volume in the few weeks has been as follows:
Week 1 - 43,000
Week 2 - 30,900
Week 3 - 37,500
Week 4 - 42,600
Week 5 - 33,000 (the most recent week)
If an affiliated person wanted to liquidate some of his holding of 100,000 shares pursuant to SEC Rule 144, how many shares could he sell?
Question345: Municipal bond brokers generally conduct the following:
Question346: Which of the following are considered to be discretionary orders under the FINRA Rules of Fair Practice?
Question347: With the Regulation T requirement at 50%, a firm wishes to impose house rules that require a minimum equity of 40%.
Which of the following is true?
Question348: Which of the following situations is possible for a writer of a covered call option?
Question349: Bubba opens a new account with a broker/dealer and asks for a copy of the firm's financial statement. If the firm has not been subject to a formal audit by an independent public accountant for quite some time, what should it do in response to the request?
Question350: The public offering price of the securities of an open-end management investment company is:
Question351: Bubba is age 54 and has investments in a retirement plan with his former employer valued at $104,500.
Bubba withdraws $25,000 to open a retail clothing store.
Which of the following statements is true regarding Bubba's tax consequences?
Question352: A CMO is issued that has three tranches. One has an average life of 2 years. A second has an average life of 10 years. The third has an average life of 30 years. Initially, interest payments are distributed in this order:
Question353: If a mutual fund has invested its assets by allocating about one-third each for bonds, preferred stocks, and common stocks, it is identified as:
Question354: Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85.
What is the yield to maturity using the "rule of thumb" method?
Question355: Which of the following is not classified as a money market instrument?
Question356: Approval for a registered investment company to change is investment objective from income to growth is required from which of the following?
Question357: When opening a brokerage account for a customer, a registered representative must determine the customer's:
Question358: A tax-free rollover of assets between qualified retirement plans for the benefit of a specific individual is permitted so long as it is accomplished within:
Question359: Bubba has been classified as a restricted person according to Rule 2790. He may purchase equity securities of an IPO except:
Question360: Service charges by a FINRA dealer for transfer and safekeeping of customer securities held in street name:
Question361: A mutual fund custodian is paid according to which of the following specifications when receiving deposits from a shareholder's reinvestment plan?
Question362: Bubba buys one XYZ October 80 put and sells one XYZ October 70 put.
What is his position called?
Question363: A group net order is one that benefits municipal syndicate members:
Question364: A withdrawal from a Roth IRA may be a qualified distribution if the Roth IRA has been open for at least:
Question365: A public offering by an investment banker in which any securities not sold are returned to the issuer is known as:
Question366: To qualify as an intrastate offering under SEC Rule 147, which of the following is true of the issue?
Question367: A new stock offering by Bubba Corporation provides details that state between 1,000,000 and 1,500,000 shares will be sold depending upon market conditions. This offering is a:
Question368: The minimum denomination for a US treasury bond is:
Question369: Bubba's margin account has $1,000 of SMA. If he buys $20,000 of listed secu rities, how much fully paid margin stock must he deposit to respond to a Reg T requirement of 50%?
Question370: If a customer fails to pay for securities purchased in a cash account, the member firm broker will do which of the following?
Question371: Which of the following is considered an intangible asset?
Question372: A mutual fund letter of intent may permissibly be predated for a period of time up to:
Question373: Big Easy Investment Banking, Inc., participates in a Western account underwriting of $10 million of municipal bonds by agreeing to underwrite 10% of the issue. One week later, $4 million remains unsold but Big Easy has distributed $1.5 million of bonds.
What is the liability of Big Easy remaining in the account?
Question374: Bubba opens a margin account and sells short 100 shares of XYZ at $50. Assuming a Reg T requirement of 50%, what is the opening balance in Bubba's account?
Question375: If federal excise taxes were increased by the government, what would the typical investor do about his securities portfolio?
Question376: A market-maker has purchased a particular stock over a period of time for prices as high as $9 per share and as low as $3 per share. The average cost is approximately $6 per share. The current NASDAQ quote for the stock is 5 to 5.25. According to the FINRA Conduct Rules, the dealer's offering price to the public should be based upon:
Question377: The FINRA markup policy requires that over-the-counter transactions with a customer be at:
Question378: Bubba buys a ten-year municipal and at 102 and sells it five years later at 101.
What is tax treatment?
Question379: A mutual fund characterized by a modest sales charge and an investment in a fixed portfolio of municipal securities is a:
Question380: Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85.
What is the current yield?
Question381: A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering.
What is the subscription price per share?
Question382: In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600.
If Bubba sells the stock at $45 in July, what is his resulting tax liability for that transaction?
Question383: The preferred stock of Greatest Technology Corporation has a $100 par and is convertible into four shares of common stock. The preferred is trading at 104.50. The preferred is callable at 101. If the common stock price is presently 27.89, which of the following actions would be a successful arbitrage:
Question384: Which of the following is a benefit of Section 8 low-income housing partnerships?
Question385: Bubba plans to borrow some money and pledge securities as collateral.
Which of the following can he not use as collateral?
Question386: The principal underwriter of an open-end investment company is frequently called:
Question387: Which of the following is not usually an additional function of a mutual fund's custodial bank?
Question388: Which of the following is an analyst most likely to classify as a defensive issue?
Question389: In comparing the premium cost of a LEAPS option with a premium of a traditional option on the same security and same strike price, which of the following is generally true?
Question390: A treasury obligation having no fixed rate of interest with a thirty-day maturity due April 22 is most likely a: