Which of the following is generally NOT TRUE in relation to Corporate Commercial Paper?
(A) Commercial paper is normally offered in book-entry form.
(B) Commercial paper is normally issued in callable form.
(C) Commercial paper is normally sold at a disco
?
One of your clients has been pleased with your recommendations and now wants to allow you, their RR, discretionary authority over their account. The client tells you that they have filled out and sent the appropriate forms to give written discretionary au
B
An investor buys 100 shares of ABC at $50 per share and sells one ABC July 55 call for a premium of $2. What is the maximum possible loss for this investor?
(A) $4,500
(B) $4,800
(C) $5,000
(D) $5,500
B
Which of the following statements is FALSE when discussing the Federal Funds Rate?
(A) Changes to the supply of money and demand for money cause fluctuations in the federal funds rate.
(B) The Federal Reserve directly sets the Federal Funds Rate.
(C) Hist
?
Of the choices listed, which would be considered to be the most appropriate investment choices for a Senior Investor?
U.S. Government Bonds
Deferred Variable Annuity
U.S. Savings Bond
Immediate Variable Annuity
(A) I & III
(B) I & IV
(C) II & III
(D) II &
?
One of your clients refers a friend. After talking with the referred friend, she opens an account with you, deposits $20,000, and states that she wants you choose some stocks that will have good growth potential whenever you feel it is the right time to b
B
Which of the following are true about the purchase of variable annuities?
(A) The monthly premium varies.
(B) The monthly payout varies.
(C) The monthly premium is voluntary.
(D) The monthly payout is fixed.
B
All of the following statements about municipal auction-rate securities are TRUE EXCEPT:
(A) At auction, a rate is determined which will be the lowest interest rate which would provide for the sale of all of the securities in the market.
(B) The rates on
C- ?
When a client opens an options account at a firm, regulations dictate that the firm must receive an account agreement signed by the customer in what time frame?
(A) Following approval of the account, the firm must receive the signed account agreement with
A
130 QRN: 50991
An existing client in her late 20s comes in with her boyfriend. The couple is not married, but they desire to open an account set up as a JTWROS (Joint Tenants with Rights of Survivorship). They specify that the money that they would like t
D
A younger client with a moderate amount of funds is considering the purchase of a home in the near-term future. For this reason, the investor wishes to keep their assets as liquid as possible in the event that the right deal on a home comes along. As this
B
The factor listed below which would have a direct impact on the alpha of a particular stock would be:
(A) Investors on a general scale have changed their minds from being pessimistic about the market to being optimistic.
(B) The company whose stock is in
D ?
In terms of features that would limit the credit risk that would apply to a municipal bond issue, which of the following would do so most effectively?
(A) Being backed by general obligation
(B) A legal opinion that is un-qualified or non-qualified
(C) An
?
Mr. Smith advises his registered representative to sell 300 shares of his ABC common stock whenever the price is right. Later that day ABC starts to move up and the RR enters a market order to sell the stock. Which of the following statements is true?
(A)
D
Question 15 of 130 QRN: 47184
All of the following are components of the calculation to find compound accreted value (CAV) on zero-coupon bonds EXCEPT?
(A) the maturity date of the bond
(B) the dated date of the bond
(C) the bond's original yield at offer
B
SEC rule 415 allows "Shelf Registration." This permits one registration statement to cover all securities to be issued during the next:
(A) Six months.
(B) One year.
(C) Two years.
(D) Three years.
B
SEC rule 415 allows "Shelf Registration." This permits one registration statement to cover all securities to be issued during the next:
(A) Six months.
(B) One year.
(C) Two years.
(D) Three years.
B
One of your fellow registered representatives wishes to send out an approved worksheet on options. The worksheet must be sent out with, or preceded by, which of the following documents?
(A) Documents including the appropriate disclaimers
(B) Documents rel
D
Which of the following is TRUE in relation to securities being pledged as collateral for loans when the securities are pledged by a customer to the broker/dealer firm?
(A) This type of pledge would be called hypothecation.
(B) This type of pledge would be
A
An analyst is evaluating a general obligation municipal bond. All of the following situations would be considered to have a negative affect on the bond EXCEPT?
(A) unfunded pension liabilities are increasing
(B) the issuance of long-term debt to satisfy c
?
A trader buys 10 OEX 300 call options at 4.50. The OEX Index is currently selling at 290. How much must the trader pay for the option?
(A) $3000
(B) $4,500
(C) $30,000
(D) $45,000
B
A private electronic system that displays, matches, and executes orders in listed and OTC securities would be:
(A) an Exchange
(B) a market-maker
(C) a third market
(D) an Electronic Communication Network (ECN)
D
In a margin account, "equity" is defined as:
(A) the common stock in the account
(B) the debt investment in the account
(C) securities listed on a national exchange
(D) the net financial ownership in the account
D
Mr. Smith has been watching ABC common stock for several years and feels that ABC will remain neutral or stable for the next year. Based on this assumption, which of the following options positions would allow Mr. Smith to realize the MOST in terms of pro
?
Question 24 of 130 QRN: 232802
An investor who holds a variable annuity decides to annuitize and start receiving monthly annuity payments. The client is currently 65 years of age and the variable annuity is non-qualified. What can this investor expect to
B
A broker explaining a Section 529 College Savings Plan to clients who are the parents of a college bound child who are interested in making advance provision for the costs of college should disclose all of the following characteristics of such plans EXCEP
A?
Of the following forms of communications that may take place between a firm and individual investors, which constitutes sales literature under regulatory guidelines?
I.During the course of a business day, a registered representative sends one specific pro
B
A market maker is quoting ABCD common stock, a NASDAQ security. The spread in this security is best described as the difference between
(A) the dealer's cost and the sale price with the mark-up
(B) the dealer's cost and the quoted bid price
(C) the dealer
B
Which of the following funds would be the least suitable for a retiree in need of a steady stream of income?
(A) A bond fund
(B) A sector fund
(C) A balanced fund
(D) A growth and income fund
C
When a corporation is investing its funds, which of the following types of securities provides the best tax incentives for the corporation?
(A) Convertible fixed income debt securities
(B) Treasury securities
(C) Corporate debt securities
(D) Corporate pr
?
The negotiated underwriting of municipal securities usually involves all of the following EXCEPT:
(A) a bid form
(B) a legal opinion
(C) an underwriters agreement
(D) a bond purchase contract
B?
When an investor buys a call option, regardless of whether it is an Equity or Stock Index option, the maximum risk or loss potential to the investor is the
(A) premium that was paid for the contract plus any out-of-the-money amount
(B) premium that was pa
C
All of the following positions have unlimited loss potential except
(A) Short stock-short put
(B) short straddle
(C) uncovered call
(D) uncovered put
D
When filing the registration statement with the SEC on an IPO the issuer can also include any securities it intends to issue in upcoming three year period. When this is done the registration of the shares that can be issued in the upcoming three years wou
A
A client purchased 200 shares of ABC for $22,500 two years ago. Over the next few years the client sold call options for a total of $1,500. All the calls expired worthless. For tax purposes, the cost basis for the 200 shares of ABC is
(A) $22,500
(B) $21,
A
A stock traded on Level 1 NASDAQ is as follows
ABCD 49 +.50 B 48.84 A 49.09 V13.000 12:00p
If your customers buys 100 shares of ABCD as an agency transaction the customer would have paid how much per share?
(A) 48.84
(B) 48.84 plus a commission
(C) 49.09
?
Of the following, which offers the MOST accurate description of a municipal bond that is considered "double-barreled"?
(A) These bonds are backed by the unlimited taxing power of a municipality along with the ability of State-level appropriations in the e
B
(A) Beta measures the returns that a company has against the stocks of individual companies both inside and outside of the same sector.
(B) Beta measures the price-to-earnings ratio of one company in relation to the average price-to-earnings ratio of comp
C
An investor has a large portfolio of Blue Chip common stocks and expects the market to remain stable or decline slightly. He'd like to increase the rate of return on his portfolio. Which of the following would be the best choice for this investor?
(A) Buy
C?
A registered representative recommends that a client purchase shares of a mutual fund today rather than tomorrow because the fund shares will go ex-dividend tomorrow. The registered representative explains that if the client waits until tomorrow to purcha
B
When a bond is trading at a discount, the current yield on the bond is:
(A) unrelated to its yield to maturity
(B) less than its yield to maturity
(C) equal to its yield to maturity
(D) more than its yield to maturity
D
One of your clients is an experienced options trader. The client has recently established a trend of buying calls on a broad-based index. Why would this investor be performing these trades?
(A) This would indicate that the investor has a bearish sentiment
B
Instinet and the Fourth Market have all of the following characteristics except:
(A) trades large blocks for institutions
(B) quotes may be displayed
(C) transactions are crossed on the NYSE Floor
(D) commissions are lower on the large trades
D
Which of the following terms represents option positions?
Opening Purchase
Opening Sale
Closing Purchase
Closing Sale
(A) I and II
(B) III and IV
(C) II and III
(D) I, II, III, and IV
D
A client recently purchased a sizeable number of mutual fund shares and knows that the Net Asset Value will change daily. The customer asks the RR how the NAV number is computed. Which of the following best describes the computation to arrive at NAV per s
B
If an investor is seeking capital gains and income from their investments, what type of investment would BEST suit these objectives?
(A) The purchase of a block of growth stock
(B) The deposit of funds into a money market account
(C) The purchase of a mut
C
Which of the following BEST describes the money received by a corporation during an issue of equity securities that exceeds the face value of the securities being sold?
(A) This would refer to the capital that the corporation must keep on hand.
(B) This w
D?
A day trader of blue chip common stocks would be most concerned with which of the following risks?
(A) purchasing power risk
(B) timing risk
(C) default risk
(D) interest rate risk
A
A client wishes to diversify her portfolio of municipal bonds by quality. In order to perform this task, the RR's BEST approach would be to analyze what?
(A) Each bond's credit rating
(B) Each issuer's location
(C) The intended use of each bond's proceeds
...
A registered representative has been going over investment objectives and various investment products with a client. The RR has come to the conclusion that a mutual fund comprised of various bonds is the best choice for this particular client. When the RR
C?
Which of the following would NOT be considered a "bullish" options strategy?
(A) An investor establishes a short straddle.
(B) An investor buys a call.
(C) An investor establishes a call spread at a net debit.
(D) An investor sells a put.
A
Which of the following U.S. Government securities are classified as money market instruments?
(A) Treasury bills
(B) Treasury notes
(C) Treasury bonds
(D) Treasury strips
C?
The price of two funds are as follows at the end of the day of Tuesday, January 15th:
NAV Offering Price Net Asset Change
Fund X 10.20 10.95 -0.04
Fund Z 11.80 12.57 -0.08
One of your clients called and entered a redemption order for 250 shares of Fund X
?
One of your clients owns 500 shares of BCD stock and is concerned with tax consequences associated with their investments. BCD announces a 5% stock dividend on their common stock and your client will be receiving 25 additional shares. The client calls in
D
Hedge Funds are normally established in the form of:
(A) an investment company
(B) a limited partnership
(C) a variable annuity
(D) a CMO
A
The market price of a municipal bond may be affected by changes in:
Tax law
Market conditions
The credit rating of the issuer
(A) I only
(B) III only
(C) I and II only
(D) I, II and III
C?
Subscription warrants are usually issued as part of:
(A) A common stock offering to obtain a higher par value
(B) A preferred stock offering to obtain a lower par value
(C) A debenture offering to obtain a lower interest rate
(D) A convertible bond to obt
C
A client sells a stock short in their portfolio. The client plans to cover the short sale but prior to covering, calls to ask the RR how to achieve long-term status for capital gains purposes on the short sale. How should the RR respond?
(A) The RR should
A
A broker/dealer firm has become insolvent. SIPC liquidation procedures have begun. Jill and Jack are married and each of them have individual accounts along with a joint account with each other at the firm. The following are their account balances: Jill's
B
Excise taxes on cigarettes, alcohol, and gasoline secure certain securities issued by a municipality. Which of the following is the MOST appropriate statement regarding this type of municipal issue?
(A) These would be BABs (Build America Bonds).
(B) These
C?
One of your clients wants to free up some capital and decides to sell a municipal bond out of their portfolio. The bond last paid interest a couple of months ago and will not pay interest again for a few months. In this situation, who pays the accrued int
B
Joe is an employee of Municipal Securities Dealer A. He intends to open an account where he wishes to maintain funds and execute transactions with Municipal Securities Dealer B. All of the following are required of Municipal Securities Dealer B, EXCEPT:
(
B
Eurodollars are BEST described with which of the following statements?
(A) Eurodollars are the currency of a group of European countries.
(B) Eurodollars represent currency of the U.S. that is currently being held in foreign (non-U.S.) banks.
(C) Eurodoll
B
One of your clients holds a preferred stock which has not paid dividends for the past two quarters. The paperwork for the preferred stock REQUIRES that dividends that were not paid must be paid prior to any dividends are paid to stockholders of common sha
A
FINRA regulations apply to communications with the public and advertising by broker/dealer firms. Of the following communications, which would be labeled as an advertisement and would have to abide by advertising regulations?
(A) A web log (blog) which ha
C
An investor, whose investment objective is speculation, would MOSTLY be concerned with which of the following?
(A) Their exposure to reinvestment risk
(B) Their exposure to currency risk
(C) Their exposure to interest rate risk
(D) Their exposure to capit
C
Using an annuity to fund a qualified retirement plan:
(A) is unsuitable under any circumstances
(B) is suitable if it is a fixed annuity but is unsuitable if it is a variable annuity
(C) is unsuitable because the earnings in both the annuity and the quali
C?
During a discussion with a client to determine investment objectives, a client indicates a strong desire to preserve capital. The client also would like to see some current income from their investments. Which portfolio recommendation would BEST suit this
C
One of your clients is a sophisticated 40 year old investor and has recently changed jobs. The client is considering rolling over his $100,000 401(k) plan with his former employer to an IRA. He invests conservatively in his personal brokerage account whic
D
One of your clients is an options trader. In looking over the financials and news for Company X, this client feels that Company X common stock will not fluctuate much in price over the next several months. Which options position listed below will provide
B
Which of the following statements about preferred stock is true?
(A) Preferred stock is considered an equity security.
(B) Preferred stocks have maturity dates that are fixed.
(C) Generally, preferred shares come with voting privileges.
(D) Most preferred
A
Question 95 of 130 QRN: 43459
An investor, Mrs. Smith, is seeking a mutual fund offering a high yield. Which of the following is the best choice for Mrs. Smith?
(A) Aggressive Growth Fund
(B) Hedge Fund
(C) Income Fund
(D) Emerging Growth Fund
?
A specified group of stocks is combined and a mathematical figure is used to indicate the value of this group of stocks as a whole. Collectively, what is this group of stocks called?
(A) This describes an index of securities.
(B) This describes the beta c
?
Of the following types of orders, which would generally be used to protect an existing position or profit?
I.buy limit
II.sell stop
III.buy stop
IV.sell limit
(A) I, III
(B) I, IV
(C) II, III
(D) II, IV
?
Which of the following would NOT be considered to be a Money Market Instrument?
(A) Jumbo Certificates of Deposit
(B) Bankers Acceptances
(C) Treasury Bills
(D) ADRs (American Depositary Receipts)
?
A client is evaluating purchasing corporate bonds versus purchasing municipal bonds. In their evaluation, the client wishes to evaluate the equivalent yield required by a corporate to compensate for the tax benefits of the municipal bonds. Which of the fo
?
Which of the following BEST describes what earnings coverage means when dealing with a revenue bond for a municipality?
(A) The term describes available revenue that the issuer can use to pay debt service.
(B) The term describes the funds set aside to rep
A
Assuming investments of similar quality and coupons, which would be most appropriate for an investor who is anticipating a decline in interest rates over the next 15 years?
I.Tax anticipation notes.
II.Noncallable 15-year bonds.
III.30-year bond putable i
C
Which of the following would NOT be permitted when dealing with illustrations pertaining to yields or income levels in relation to mutual funds and variable annuities?
(A) Illustrations of annualized yields
(B) Illustrations pertaining to current yields
(
?
What is the typical make-up of a balance sheet?
(A) The overall values of outstanding bonds plus outstanding stocks is equal to the total assets of the company. (Bonds + Stocks = Total Assets)
(B) The total liabilities plus the company's net worth equals
B
Which of the following statements are generally accurate regarding securities issued by agencies of the U.S. Government?
Though these securities pay interest, only the principal is considered to be a safe and liquid.
The U.S. Government does not fully bac
B
If a long call option is exercised by the holder, the holding period on the acquired securities begins:
(A) on the date the call is exercised
(B) the day after the option is exercised
(C) the day the call option was acquired
(D) the day after the call opt
B
Registered representatives are responsible for obtaining certain client information prior to allowing clients to invest in certain securities. Prior to an investor signing a limited partnership's subscription agreement, the RR should know each of the foll
?
A registered representative suggests and then implements a strategy in a client's portfolio. This strategy involves the RR coming up with certain determinations in relation to an appropriate distribution of investments in the client's account and the main
C?