Which statements are TRUE regarding the effect of changing interest rates on the expected maturity of a CMO tranche?
I If interest rates rise, then the expected maturity will lengthen
II If interest rates rise, then the expected maturity will shorten
III
I and IV
All assets minus all liabilities equals:
net worth
To sell variable annuities, salespersons must be registered with:
I FINRA
II State Insurance Commission
III State Banking Commission
I and II
The investment strategy that involves paying a lower price for a security based on the expectation that the market is mispricing the issue is:
value investing
To satisfy MSRB disclosure requirements for new municipal issues, a customer would be provided with a copy of the:
official statement
Under a municipal revenue bond rate covenant, rates must be set to cover all of the following EXCEPT:
A. deposits to the reserve maintenance fund
B. debt service
C. maintenance of the facility
D. operation of the facility
A. deposits to the reserve maintenance fund
The date that SIPC uses to value securities for purposes of insurance coverage limits is the date that the:
petition was made in court for a trustee appointment
An inverted "saucer" formation is:
I bullish
II bearish
III a reverse upward trend
IV a reverse downward trend
II and III
Eurodollars are:
I European currency deposits
II U.S. dollar deposits
III held in foreign branches of U.S. banks
IV held in U.S. branches of foreign banks
II and III
Industrial development bonds are backed by:
I the lease obligating the private user to rent the facility for the life of the bond issue
II the unconditional guarantee of the private user
III securities pledged as collateral by the private user
IV the fait
I and II
All of the following securities are redeemable EXCEPT:
A. Common stock mutual funds
B. Bond mutual funds
C. Corporate debentures
D. Series HH bonds
C. Corporate debentures
(Corporate debentures are negotiable (tradeable) - they cannot be redeemed with the issuer. They trade OTC and on exchanges.)
Which statements are TRUE regarding variable annuities sold via a contractual plan during the accumulation phase?
I Periodic payments of fixed dollar amounts are made
II Periodic payments of varying dollar amounts are made
III A fixed number of units is p
I and IV
Short sale transactions are not typical for what?
Municipal bonds
A customer enters an order to buy 500 shares of ABC stock at $38.00 IOC. 200 shares are filled at $38.00; 200 shares are filled at $37.50; and 100 shares are not filled. Which statements are TRUE?
I The customer must accept the partial execution
II The cu
I and IV
IOC: Immediate or Cancel - requires the trader to execute the order in part or in full in one attempt, with the unexecuted portion of the order (if any) canceled.
A direct participation program offering which is "managed:"
A. hires a professional investment manager to select the program's investments
B. is offered through wholesalers on a best efforts basis
C. is offered by a syndicate on a firm commitment basis
D.
C. is offered by a syndicate on a firm commitment basis
Prior to the filing of a registration statement, which of the following activities is (are) permitted?
I A member firm signing a syndicate agreement to become part of the underwriting group for the issue
II A member firm distributing preliminary prospectu
I only
Trades of options settle "regular way":
next business day
in Clearing House funds
Which of the following are "preference" items included in the alternative minimum tax computation?
I Excess intangible drilling costs
II Excess depletion
III Straight line depreciation
IV Tax credits
I and II
Which statement about required signatures when opening an account is FALSE?
A. To open an account, joint tenants with rights of survivorship, the signature of each tenant is required
B. To open an account, joint tenants in common, the signature of each te
C. To open a general partnership account, the signature of each partner is required
(To open a general partnership account, only the signature of one general partner is required.)
Which of the following cover a short ABC put?
I Long ABC stock position
II Short ABC stock position
III Cash equal to the aggregate exercise price
II and III
A new customer calls a representative and says the following: "I own 1,000 shares of DEF stock, which is currently held at another broker-dealer. I want to sell the shares at the market." The representative accepts the order from the customer. The order t
short sale
Diversification among multiple asset classes reduces the:
I market risk of the portfolio
II marketability risk of the portfolio
III standard deviation of portfolio returns
I and III
Which statements are TRUE regarding the purchase of a new issue directly from the underwriter by industry personnel?
I Purchase of IPOs directly from the underwriter that open for trading in the secondary market at a discount price is permitted
II Purchas
III and IV
After exercising an equity options contract, the trade settles:
in 2 business days after trade date
Which of the following are considered in determining a fair and reasonable price in a municipal principal transaction?
I Availability of the security
II Dollar amount of the transaction
III Value of services rendered by the municipal broker
IV The fact th
I, II, III, and IV
Federal Reserve actions can directly influence which of the following?
I Discount Rate
II Federal Funds Rate
III Money Multiplier
IV Money Velocity
I, II, III, and IV
All of the following securities are sold through auction EXCEPT:
A. Treasury Bills
B. Treasury TIPS
C. General Obligation Bonds
D. Government National Mortgage Association Bonds
D. GNMA
(All agency securities, including GNMA issues, are sold through selling syndicates in a negotiated offering.)
Which of the following information is available on EMMA?
I Official Statements for municipal bond issues, notes, and 529 plans
II Details of bonds that have been pre-refunded
III Real-time prices and yields for municipal bond trades, as reported through R
I, II, III, and IV
Distributions after age 59 � from non-tax qualified retirement plans are:
A. 100% taxable
B. partial tax free return of capital and partial taxable income
C. 100% tax free
D. 100% tax deferred
B. partial tax free return of capital and partial taxable income
(Contributions to non-tax qualified plans, such as most variable annuities, are not tax deductible. They are made with "after-tax" dollars. Earnings accrue tax deferred. When distributions c
A structured product that invests in tranches of private label subprime mortgages is a:
CDO
(Collateralized Debt Obligation- structured products that invest in CMO tranches)
Which of the following statements are TRUE about All or None orders?
I The order can be executed in part or in full
II The order must be executed in its entirety
III If the order cannot be filled, later execution attempts are permitted
IV If the order can
II and III
Which of the following statements are TRUE about the Pink Sheets?
I Equity issues too small to be included on NASDAQ are found in the Pink Sheets
II Equity issues listed on stock exchanges are found in the Pink Sheets
III Bid and ask quotes are found in t
I and III
Stabilization rules for new issues are:
A. set by FINRA
B. covered under the Securities Act of 1933
C. covered under the Securities Exchange Act of 1934
D. covered under the Securities Investor Protection Act of 1970
C. covered under the Securities Exchange Act of 1934
All of the following bonds trade "flat" EXCEPT:
A. defaulted bonds
B. zero coupon bonds
C. market discount bonds
D. adjustment (income) bonds
C. market discount bonds
Which statements are TRUE about variable annuities?
I Contributions to the separate account are tax deductible
II Contributions to the separate account are not tax deductible
III Earnings in the separate account build tax-deferred
IV Earnings in the separ
II and III
An income fund would likely invest in all of the following securities EXCEPT:
A. common stocks
B. preferred stocks
C. corporate bonds
D. government bonds
A. common stocks
(income funds invest primarily in bonds and preferred stocks for a high level of current income)
The expense ratio of a mutual fund is:
Fund Operating Expenses / Total Net Assets
The underwriter is responsible for which of the following in a new corporate offering?
A. Printing of the prospectus
B. Printing of the certificates
C. Registration of the Securities and Exchange Commission
D. Selling the securities to the investment comm
D. Selling the securities to the investment community
Which of the following statements are TRUE regarding REITs?
I REITs are similar to closed end investment companies
II REITs issue shares of beneficial interest representing an undivided interest in a pool of real estate investments
III REITs are similar t
I, II, and IV
The Firm Element component of the "Continuing Education" requirement:
I is administered by the compliance department
II must be completed by all registered persons
III must be completed annually
IV must communicate information that is understood by the pa
I, II, III, and IV
Which of the following statements are TRUE regarding the Securities Exchange Act of 1934?
I The general provisions of the Act apply to non-exempt securities only
II The general provisions of the Act apply to both exempt and non-exempt securities
III The a
I and IV
A registered representative is allowed to choose which of the following in a transaction without requiring written trading authorization from the customer?
A. Quantity and price
B. Security and time
C. Price and time
D. Security and price
C. Price and time
Exchange traded funds can NOT be:
A. bought on margin
B. sold short
C. traded anytime during exchange hours
D. redeemed with the sponsor
D. redeemed with the sponsor
Which of the following statements are TRUE regarding tax sheltered annuities for employees of non-profit organizations?
I These are known as 401(k) plans
II These are known as 403(b) plans
III Monies contributed to this plan are excluded from taxable inco
II and III
Of the choices offered, the most actively traded option contract is the:
A. Standard and Poor's 100 Index option (OEX)
B. Major Market Index option (XMI)
C. Value Line Index option (VLE)
D. NASDAQ Index option (NDX)
A. S&P's 100 Index option (OEX)
Super Display Book is the automated trading system for the:
New York Stock Exchange
The Securities Exchange Act of 1934 regulates trading of all of the following EXCEPT:
A. Commodities Futures
B. Options
C. Corporate Bonds
D. Corporate Stock
A. Commodities Futures