QUESTION NO: 1
With respect to the public offering of securities by an underwriting syndicate, which of the following is true?
With respect to the public offering of securities by an underwriting syndicate, which of the following is true?
Correct Answer: D
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QUESTION NO: 2
A mutual fund custodian is paid according to which of the following specifications when receiving deposits from a shareholder's reinvestment plan?
A mutual fund custodian is paid according to which of the following specifications when receiving deposits from a shareholder's reinvestment plan?
Correct Answer: A
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QUESTION NO: 3
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?
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?
Correct Answer: D
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QUESTION NO: 4
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?
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?
Correct Answer: D
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QUESTION NO: 5
When opening a brokerage account for a customer, a registered representative must determine the customer's:
When opening a brokerage account for a customer, a registered representative must determine the customer's:
Correct Answer: B
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QUESTION NO: 6
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?
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?
Correct Answer: D
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QUESTION NO: 7
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:
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:
Correct Answer: D
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QUESTION NO: 8
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%?
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%?
Correct Answer: C
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QUESTION NO: 9
Which of the following is not good delivery on a sale of 470 shares?
Which of the following is not good delivery on a sale of 470 shares?
Correct Answer: A
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QUESTION NO: 10
Which securities do not receive dividends?
Which securities do not receive dividends?
Correct Answer: C
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QUESTION NO: 11
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?
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?
Correct Answer: B
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QUESTION NO: 12
Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85.
What is the current yield?
Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85.
What is the current yield?
Correct Answer: A
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QUESTION NO: 13
Bubba buys a municipal bond at 102 and holds it ten years to maturity.
For tax purposes, how is that premium treated?
Bubba buys a municipal bond at 102 and holds it ten years to maturity.
For tax purposes, how is that premium treated?
Correct Answer: C
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QUESTION NO: 14
Bubba is eligible for a Roth IRA. He may convert his SEP-IRA to a Roth IRA:
Bubba is eligible for a Roth IRA. He may convert his SEP-IRA to a Roth IRA:
Correct Answer: D
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