What Must be stamped on a trade ticket when the recipient does not have knowledge of the trade?
Null & Void
Cleared
Return to Seller
Don't Know
Which of the following can be considered a possible disadvantage of the automated execution system?
Automated execution system enters trades when a trader is not present.
Automated execution system can buy & sell large orders simultaneously.
Automated execution system executes trades based on a variety of metrics.
Automated execution system continues to trade based on preprogrammed indicators unless someone interveness
What is a security with ownership recorded electronically by a financial institution and without a paper certificate?
Due Bill
Bearer security
Stock Power
Book Entry security
Which of the following is a listing requirement for the NASDAQ?
4 market makers
Minimum bid of $5 per share
Market Capitalization greater than $750 million
Minimum of $1.25 Million shares trading
Which instrument will most likely pay the highest rate of interest?
Short-term commercial paper
Short-term asset-backed securities
Medium-term Treasury Notes
Long-Term corporate bonds
What components are needed to calculate the DuPont identity?
Earnings, share price, dividends
Net income, Sales, Assets, Equity
Inventory, Liabilities, Debt, Net Sales
Depreciation, Interest, Amortization, Taxes
What is the benefit of the TRACE system?
It generates fees from investors and brokers who use TRACE
It provides transparency to boost investor confidence in OTC trading
It prevents trading
It allows for faster trade execution
Which of the following is an investment concept that should be applied to a customer's financial profile to determine the best investment for a customer?
Turnover ration
Total Investment portfolio
Current financial status
Risk vs return
Which of the below items are examples of riders on variable-annuity contracts?
   I.   A cost of living adjustment
   II.  A lump sum payment of principal
   III. A positive covenant
   IV.  A negative covenant
I and II
III and IV
I and III
II and IV
In technical analysis, what is a resistance level?
The aveage level a stock has traded at in the past 52 weeks
The difference between the highest and lowest point a stock has traded at in the past 52 weeks
The level the stock has traded up to, buy not through, multiple times in a short time period
The point on the chart of a stock that forms the second shoulder in the bearish head and shoulders patterns
Which of the following produces data that advisors can use to analyze financial markets?
Conference Board of Customer Confidence
Minnesota Consumer Sentiment Index
Federal Reserve
The NYSE Volatility Sentiment Index
Assuming the required margin is 50%, what is the dollar amount in the client's margin account immediately after $1,000,000 worth of Microsoft stock is borrowed and sold for a short sale, and the value of the shares then increase by 50% - to $1,500,000?
3,000,000
1,000,000
500,000
0
Kelly buys Corp 4s of 38 J/J Bond. She buys the bond on Monday, October 15. How many days does it accrue interest?
75 Days
82 Days
50
106
If there are two bonds with the same credit risk, the same coupon rate of 5%, and the same maturity date, but one of them has an adjustable interest rate that resets each quarter to the current 10-year treasury rate, what happens to the two prices of the bonds if the Treasury rate increases by 2%?
Both Bonds will increase in value
The coupon rate will increase by 2% on both bonds
Only the adjustable-rate bond will increase in value
The fixed rate bond will drecase in value, but the adjustable -rate bond's price shouldn't change by much.
What are American Depositary Receipts (ADRs)?
Shares of US companies sold on foreign stock markets
Deposit similar to CDs
Shares of foreign companies purchased in teh US without having to go through foreign stock exchanges
Stock receipts allowing for the purchase of additional shares
If a mutual fund has a public offering price of 32.56 and a net asset value of 27.18, what is the sale charge?
19.7%
16.5%
5.4%
6.5%
Which of the following is true about research analysts?
Conflicts of interest include family ownership of subject company securities
Reaserch analysts must be reviewed quarterly
Review is completed by the board of director
Conflicts of interest must be noted in a research analyst's file
When must registered person first complete the Regulatory Elemnt?
Before they are allowed to register
On the first anniversary of their registration
On the second anniversary of their registration
On the third anniversary of their registration
An arbitrage short selling strategy occurs in which of the following situations?
When an investor owns shares and wants to protect their return in case the stock declines in value
When the investor does not own shares and short sells a stock because he or she feels it is overvalued
When the investor uses a straddle
When the investor wants to take advantage of pricing differences in different markets
What is the role of Electronic Communication Networks (ECN)?
To measure volume of shares traded in exchanges, such as the NYSE
Produce technical charts that are used by analystis to predict market moves
Regulate hedge funds by requiring them to file electronic notices with a network
Facilitate direct trading for investors in an electronic manner outside of the regulated exchanges
The wash sale rule applies to which of the following actions?
Rolling a put forward with the same strike price
Rolling a call forward with a different strike price
Selling an investment for a loss and repurchasing a sebstantially similar investment with in 30 days
Municipal bond issuers refunding existing bonds with new ones at a lower interest rate
A company uses the straight-line depreciation method and would like to depreciate a tractor that was recently purchased for $45,000. The salvage value is $6,000 and the useful life is 15 years. What is the depreciation expense?
$3,400
$2,700
$3,000
$2,600
A company's earnings over the calendar year of $100 million, and the company has 10 million outstanding shares. At the end of the year the company pays a quarterly dividend of $1 per share. What is the annualized dividend payout ratio?
10%
40%
1%
4%
What type of account involves selling securities borrowed directly from the broker?
SMA
Maintenance Account
Long Margin Account
Short Margin Account
A wrap account is most appropriate:
For a client who is predominantly a buy and hold investor
For a client who actively trades
For a client whishing to follow a dollar cost averaging approach
For a client nearing retirement who will primarily be withdrawing rather than making a new investments
Which of the following preferred issues is likely to fluctuate most in value?
Cumulative preferred
Callable preferred
Convertible preferred
Broker preferred
Becky owns stock with cumulative voting rights. There are five vacancies on a board and she owns 100 shares of stock. Becky is entitled to cast the following votes:
Total of 100 votes
Total of 100 votes per
Total of 500
You are not allowed to vote
Which of the following rates does an ADR holder not have?
Preemptive rights
The right to transfer ownership
The right to see financial statements
The right to vote for your mother -in law as a board member
The definition of debentures is
Loan secured by real estate
Collateralized securies
Worthless security
Securities backed by the general credit of the issuers but no specific collateral
Although a corporation has no earnings in a particular year, it is obligated to pay interest on all its outstanding debt except the following:
Covertible Subordinated debentures
Adjustment bonds
Collateral trust bonds
Equipment trust certificates
Bubba buys a 5% bond that matures in 15 years with a 5.10 basis. How much did he pay for the bond?
5
98.96
100
105.10
Which of the following securities provides the longest term of option privilege?
Puts
Calls
Warrents
Rights
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?
40
30
25
15
Which of the following price quotes is representative of a treasury bill?
98.9 - 100
5.78 - 5.73
5.55 - 5.75
96 - 96½
Kelly buys a US treasury bond. The interest he earns is:
Subject to federal and state income tax
exempt from federal and state income tax
subject to federal income tax but exempt from state income tax
Subject to state income tax but exempt from federal income tax
In mid-September, Betty sells one XYZ February 50 call at $6. It subsequently expires without being exercised. How is the premium taxed?
Bubba’s cost of the underlying stock is reduced
The $600 premium constitutes ordinary income
The $600 premium is rolled over into another XYZ call with the next longest expiration date.
The $600 premium is a capital gain
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?
A $600 capital loss
Neither profit nor loss
Cannot be determined without knowing the market price of XYZ upon exercise
This is a wash sale and cannot be included in the investor’s tax calculations
A mutual fund characterized by a modest sales charge and an investment in a fixed portfolio of municipal securities is a:
Face amount certificate
Management company
Unit Investment Trust Company
Open end or closed end company
Ashley owns 200 shares of XYZ at $90, and wishes to hedge the position while generating income. What is the best recommendation?
Sell calls
Sell puts
Buy calls
Buy puts
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?
Freeze the account from further activity until a death certificate and new partnership agreement are furnished to the brokerage
No special action is required because the death of a single partner does not terminate the partnership agreement
Distribute the assets in the account to the surviving partners
Execute sell orders but do not accept buy orders or distribute assets from the account until a new partnership agreement is provided to the brokerage
What is sovereign debt?
Debt issued by companies outside of the US
Debt issued by federal governments
Debt issued by the SEC
Mortgage bonds in a foreign currentcy
If an investor wishes to profit from a position in a stock she feels will not go up or down, which of the following is the position she should take?
Buy a straddle
Buy puts and call options
Sell a straddle
Buy the stock & sell it short at the same time
Which of these securities is tied to an equity index but guarantees the preservation of the principal invested?
ETF
ETN
ELK
Equity options
Which of the following represents the investment of a hybrid REIT
Real estate and technology
Traditional realestate and hedge funds
Mortgage debt and commerical properties
Convertible bonds and DPP's
Which of the following is NOT a rule of an action market?
All transactions are secret
The first bid has priority
Bids and offers must be audible
New bids are entered when all bids at a certain price have been exhausted
What's the spread between a 10-year Treasury bond yielding 4.8% and a Treasury Note yielding 4.2%?
4.4%
.6%
1.14%
1%
What percentage of income are REITs required to distribute in order to maintain their REIT status?
90%
98%
10%
15%
What is the current yield of a bond with a par value of $1000, a coupon rate of 7% and a market value of $1,150?
70%
7%
6.1%
11.5%
A customer is consider a corporate insider if they own more than what percentage of the voting shares of a company?
15%
10%
5%
8%
What are the three areas where investment advisors should consider municipal investment diversification?
Equities, bonds, money market funds
Geographical, type, rating
State, tax yield, government type
Long-term, short-term, mid-range
If a callable bond has a yield to maturity of 4.5%, a yield to call of 4.2% and a coupon rate of 5%, what is the yield to worst?
4.5%
4.3%
4.2%
5.0%
How are closed-end funds similar to stocks?
They have a CEO & board of directos
Capital is raised through an IPO
They file a quarterly 10-Q
They issue convertible debt
In early September, a customer buys 100 shares of QRS stock for $83 per share and simultaneously writes 1 QRS Mar 90 call for $4 per share. If the QRS Mar 90 call was exercised and the QRS stock delivered, what would be the customer's per-share profit?
7
11
4
0
An investor owns 500 shares of JKL common stock. The investor's cost is $50 per share and the last quote on JKL was $60. One method the investor could use that would increase current income and offer some downside protection would be to
Buy a JKL $60 put @ 4
Sell Five JKL $60 calls @ 4
Sell a JKL $60 call @ 4
Buy Five JKL $60 puts @ 4
A customer buys 1 XYZ Aug 60 call at 4 and 1 XYZ Aug 60 put at 2 when XYZ is at 61.25. If the stock rises to 68, and the customer lets the put expire and closes out the call at intrinsic value, the result is
Gain of $600
Loss of $200
Gain of $200
Loss of $600
A customer opens the following positions: Buy 100 shares of ABC @$60; sell 1 ABC Jun 60 call @3. What is the customer's maximum gain, maximum loss, and breakeven point?
Maximum gain is $300; maximum loss is $5,700; breakeven point is $63.
Maximum gain is unlimited; maximum loss is $5,700; breakeven point is $57.
Maximum gain is $300; maximum loss is $5,700; breakeven point is $57.
Maximum gain is $300, maximum loss is unlimited; breakeven point is $57.
An active options trader establishes the following position:
Long 10 ALF Apr 40 calls at 6
Short 10 ALF Apr 50 calls at 2
 
What is the breakeven point?
46
44
4
40
A customer writes 1 OEX (S&P 100) Jun 820 call at 13 and buys 1 OEX Jun 830 call at 6 when the index is trading at 826. The breakeven point is?
827
830
826
823
An investor sells an uncovered GHI Aug 120 call for 5½ points. What is the investor's maximum gain, maximum loss, and breakeven point?
Maximum gain = $550; maximum loss is unlimited; breakeven point = $125.50.
Maximum gain is unlimited; maximum loss = $550; breakeven point = $125.50.
Maximum gain = $550; maximum loss = $114.50; breakeven point = $125.50.
Maximum gain = $550; maximum loss is unlimited; breakeven point = $114.50.
Which of the following positions has an unlimited dollar risk?
Short 1 ABC Jan 50 put; short 100 shares of ABC
Short 1 ABC Jan 50 put
Short 100 shares of ABC; long 1 ABC call
Short 1 ABC Jan 35 call; long 1 ABC Jan 40 call
If an investor with no other positions buys 2 DWQ Jun 45 calls at 3, and he exercises the calls when the stock is trading at 47.25 and immediately sells the stock in the market, what is the investor's profit or loss?
150 loss
75 loss
125 profit
75 profit
An investor goes long an XYZ May 30 put for 4¼ points. What is the investor's maximum gain, maximum loss, and breakeven point?
Maximum loss is unlimited; maximum profit is $2,575; breakeven point = $25.75 per share.
Maximum loss is $425, maximum profit is unlimited; breakeven point is $25.75 per share.
Maximum loss = $425; maximum profit = $2,575; breakeven point = $25.75 per share.
Maximum loss = $425, maximum profit = $2,575; breakeven point is $34.25 per share.
An investor purchases 1,000 shares of PLEX common stock at a price of $153 per share. Shortly afterward, with PLEX selling for 149 per share, a purchase of 10 PLEX 150 puts at 4 takes place. What is the investor's breakeven point?
153
149
113
157
A customer buys 200 XYZ at 39 and writes 2 XYZ Feb 40 calls at 3. When the stock rises to 44, the customer is exercised for a gain of
800
400
200
1600
What is the highest quality rating for a municipal bond?
MIG-1
MIG-3
AAA
BB
On exercise of the option, the holder of a put will realize a profit if the price of the underlying stock
Exceeds the exercise price plus the premium paid.
falls below the exercise price.
exceeds the exercise price.
falls below the exercise price minus the premium paid.
An investor, long 100 shares of XYZ at $23.50, writes 1 XYZ May 25 call at 2. At expiration, if XYZ is trading at $20, the investor has
An unrealized loss of $50.
An unrealized loss of $150.
An unrealized loss of $150.
an unrealized gain of $50.
A foreign currency investor is long 40,000 Swiss francs at $0.81. If the investor buys 4 Jul 80 SF puts at 1.25 to hedge, the breakeven point is
.4975
.4875
.5125
.8225

An investor holding which of the following positions is exposed to a potentially unlimited loss?

  1. Short 1 IBS Jul 50 put
  2. Short 100 shares of IBS stock
  3. Short 1 IBS Jul 50 uncovered call
  4. Short 1 IBS Jul 50 covered call
II or III
I or II
III or IV
I or IV
If a customer buys 100 XYZ at $52.50 and buys 1 XYZ Aug 50 put at 1.50, what is the customer's maximum possible loss?
Unlimited
5400
400
5250
An investor owns $100,000 of convertible bonds with a conversion price of $50. By depositing these bonds into her account, how many covered calls could she write?
2000
20
50
None
An investor writes 1 IBS 280 put for 16.60. The position is closed, and the put is bought for its intrinsic value when IBS is trading at 265.25. The investor realizes
185 profit
235 loss
145 profit
185 loss
If your customer writes a combination of a DWQ JUL 45 call at 3 and a DWQ JUL 50 put at 3.50, the customer breaks even when the price of the underlying stock is: 
 
  1. $43.50.
  2. $50.50.
  3. $51.50.
  4. $56.50.
I and III
II and IV
III and IV
I and IV
Which of the following would not be a concern for an investor writing a naked option?
The possibility of exercise
The risk/reward ratio
The loss potential
The premium the investor must pay for the contract
An investor opens the following options position: Buy 1 BOB Jan 60 call @4; Buy 1 BOB Jan 55 put @2½. What is the investor's maximum gain, maximum loss, and breakeven point?
Maximum gain is unlimited; maximum loss = $650; breakeven points are $48.50 and $66.50.
Maximum gain is unlimited; maximum loss = $650; breakeven points are $53.50 and $61.50.
Maximum gain is unlimited; maximum loss is $1,800; breakeven points at $48.50 and $66.50.
Maximum gain is $650; maximum loss is unlimited; breakeven points are $53.50 and $61.50.
An investor with no other positions sells 4 DWQ Jun 45 calls at 4. The calls are exercised when the stock is trading at 47.25. What is the investor's profit or loss?
175 profit
700 profit
700 loss
175 profit
If a customer sells short 100 ABC at 40 and sells 1 ABC Jun 40 put at 4, what is the maximum loss?
3600
0
Unlimited
400

A customer writes 1 ABC Jan 65 put at 6 and 1 ABC Jan 55 call at 7 when ABC is trading at 60. This position will be profitable if, at expiration, ABC is

  1. above $68.
  2. at $60.
  3. below $52.
  4. between $52 and $68.
II and IV
II and III
I and II
I and III
A customer goes long an MMM Jan 40 put at 5 and writes an MMM Jan 50 put at 13. The customer will break even or profit when the market price is at all of the following except
42
35
45
48
Which of the following strategies is considered most risky in a strong bull market?
Buying CAll
Selling naked put
Selling naked call
Buying a put spread
Which of the following would protect a short May 50 call?
Long Apr 45 call
Long Apr 55 call
Long Jun 45 call
Long Jun 55 call
If a customer buys 1 XYZ Jan 40 call and 1 XYZ Jan 40 put, paying total premiums of $650, and XYZ becomes worthless, the result is
Gain 650
Loss 650
Gain 3350
Loss 3350
 
A client with an options account contacts the registered representative handling the account with instructions to open the following spread: Buy 1 ABC 100 call and Sell 1 ABC 105 call at a 5-point debit. Under FINRA rules, this order
Should be refused
will be executed at the next available trade meetin will be executed at the next available trade meeting the 5-point limit.g the 5-point limit.
is for a bull call spread.
Should be turned in immediately.
If a customer buys 100 XYZ at 49 and writes 1 XYZ Nov 50 call, receiving $350 in premiums, the breakeven point is
53.5
46.5
45.5
52.5
A customer buys 200 ABC at 76 and simultaneously writes 2 ABC Mar 80 calls at 2. If the stock rises to 83, and the customer is assigned on the short calls, the customer has a gain of
1800
1400
800
1200
With no other positions, a customer sells short 100 TIP at 40 and sells 1 TIP Oct 40 put at 5. At what stock price will the customer break even?
40
45
50
35
A customer buys 300 LMN at $45 per share and writes 3 LMN Aug 45 calls at 4. The customer will profit under all of the following circumstances except
if LMN remains at $45 through expiration.
if LMN is below $41 at expiration.
if LMN rises, and the calls are exercised.
if LMN is between $41 and $45 at expiration.
Customers will have a potentially unlimited loss if they are
long 100 shares of ABC stock and short 1 ABC 50 call.
Long 1 ABC Jan 50 put and long 100 shares of ABC stock.
short 1 ABC Jan 50 put and long 100 shares of ABC stock.
Short 1 ABC Jan 50 call and short one ABC Jan 50 put.
If a client bought 100 shares of GM at $88.50, and on the same day, he went long a put at 90 for 4.25 on GM due to expire within the month, what is the breakeven point?
85.25
84.25
90.25
92.75

What is the breakeven point on the following position?

  • Buy 1 CDE Apr 30 put at 3.10
  • Write 1 CDE Apr 35 put at 5.85
33.10
32.75
30.10
32.25
After selling ABC short at 70, a customer holds the position as ABC gradually falls to $53 per share. Which of the following strategies would best protect her gain?
Sell 55 puts
Buy 55 calls
Sell 55 calls
Buy 55 puts
Which of the following would protect a short May 50 put?
Long Apr 55 put
Long Jun 45 put
Long Apr 45 put
Long Jun 55 put
If a customer buys 100 shares of stock and writes one out-of-the-money call against her long position, the breakeven point is
the cost of stock purchased plus premium
The cost of stock purchased less premium.
The strike price plus premium.
the strike price less premium.
What option strategy might be used by an investor with a short position in a stock who wishes to generate some income?
Write a call on the stock
Write a put on the stock
Go long a call on the stock
Go long a put on the stock
On Friday, September 15, an investor goes long 1 OEX Dec 575 call at 7 when the index is at 581.96. At expiration, the investor closes out the long position at intrinsic value when the index is at 580. What amount of money will be deposited in the investor's account on the following Monday, and what will the profit or loss be to the investor?
$500is deposited and there is a $200 loss to the investor.
$696 is deposited and there is a $196 gain for the investor.
$500 is deposited and there is a $200 gain for the investor.
$500 is deposited and there is a $196 loss to the investor.
If a customer is short 100 XYZ shares at 54 and long 1 XYZ 55 call at 2, what is the maximum potential loss?
Unlimited
200
100
300

A customer holds the following positions:

  • Short 100 XYZ shares at 40
  • Short 1 XYZ Oct 40 put at 5

With XYZ trading at 35, the customer is assigned an exercise notice on the put, and he uses the stock purchased to cover the short stock position. This results in

Gain 500
Gain 100
Loss 1000
Loss 500
Which of the following positions would create the most risk for an investor?
Sell short 100 shares of SSS and buy 1 SSS call
Buy 100 shares of SSS and buy 1 SSS put
Sell short 100 shares of SSS and sell 1 SSS put
Buy 100 shares of SSS and sell 1 SSS call
Your client writes 2 ABC Nov 220 calls at 5 and buys 200 shares of ABC common stock at $220 in his margin account. What is the breakeven point for the client's position?
215
225
230
210
A customer is short 100 XYZ shares at 26 and long 1 XYZ 30 call at 1. What is the maximum potential loss on the positions?
Unlimited
500
400
2500
In early September, a customer buys 100 shares of MCS stock for $83 per share and simultaneously writes 1 MCS Mar 90 call for $4 per share. The customer will break even when MCS stock is at
79
94
86
87

John opens the following positions:

Long XYZ Sept 30 call @ 4

Short XYZ Sept 40 call @ 1

The price of XYZ is at $42 on the expiration day. Assuming any in the money options are exercised, how much money did John earn or lose?

400 gain
300 loss
900 gain
700 gain
FINRA’s Advertising Regulation Department determines that a firm has not adhered to FINRA’s content standards. Which of the following does it have the authority to do?
It can fine the firm up to $2,500
It can require any or all of the firm’s communications to be filed 10 days after first use
It can require any or all of the firm's communications be approved in advance, in writing by the president of the firm
It can require any or all of the firm’s communications to be filed 10 days prior first use
On a company's income statement, the subtotal that results from subtracting cost of goods sold and operating expenses from sales is:
Retained Earnings
Gross profit
Net income
Operating Profit
Of the following strategies, which is the best to reduce credit risk for a bond investor while protecting against purchasing power risk?
Invest mainly in Treasuries
Invest primarily in high-yield bonds
Invest mainly in municipal bonds
Invest in bonds from many different issuers
Roger has been recommending an especially complex collateralized debt obligation (CDO). He doesn’t understand the CDO himself, but it’s had great returns for each of the five years it’s been in existence. Roger advises customers with a high risk tolerance to buy and hold the CDO. He recommends allocating up to 5-10% of a customer's portfolio, depending on the individual. Which of these statements is true regarding Roger's suitability obligations?
Roger has not met his quantitative suitability obligation
Roger has met all of his suitability obligations
Roger has not met his reasonable-basis suitability obligation
Roger has not met any of his suitability obligations
Mike owns 200 shares of ABC Corp @ $60 for a long market value of $12,000. His equity is $6,000. If ABC Corp declines, below what price will Mike receive a margin call?
42
40
50
35
A bond with a current yield of 6.25% and a YTM of 6.33% has a market value ________ its par value.
Greater than
Equal to
Less than
There is not enough information
Under what circumstances is a mutual fund allowed to deliver a summary prospectus instead of a statutory prospectus?
If the customer has prior experience with mutual funds
If it is accompanied by a statement advising an investor to carefully consider the fund's investment objectives, risks, and charges/expenses
If the company keeps the statutory prospectus readily available online
Always
What is the possible reward for investing in raw land?
Deferred income
Large deductions
potential capital appreciation
Lack of investment risk
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:
An income fund
a specialized fund
A balanced fund
A unit investment trust fund
Prospective bidders for a municipal bond being issued should consult what document for relevant procedures?
The Eastern account agreement
The official notice of sale
The offering circular
The SEC Registration Statement
The gross spread in a new issue depends upon which of the following?
the amount of the issue
The type of industry in which the issuer is engaged
The past record of the issuing corporation
All of the above
An excerpt from a recent tombstone ad reveals bonds offered publicly at 101. Why were they priced at a premium?
To enable investors to establish a tax loss when the bonds are redeemed at maturity
To reflect prevailing credit ratings and market conditions for the issuer
to provide the issuer with a larger deduction from pre-tax earnings for higher than usual interest payments
to comply with SEC rules mandating such pricing for debt issues maturing in the year 2000 and thereafter
When a corporation dissolves, who gets paid first?
Bank lenders
Senior bond holders
The tax collector
The lawyer
A registered representative of a FINRA member firm is going to present a seminar on retirement planning. It will be a slide show, and no specific advice will be given. The expected attendance is approximately 50 people. Under the FINRA rule on communications with the public,
the slides are considered a retail communication and need principal approval before first use.
A registered principal is required to attend to ensure that the standards of ethical conduct are maintained.
This seminar can take place only if the recommendations are tailored to the specific needs of the audience.
This is a public appearance and no approvals are necessary.
FINRA Rule 2210 deals with communications with the public. The rule classifies these communications into three different categories. Which of the following is not one of those categories?
Advertisements
Retail communications
Institutional communications
Correspondence.
A registered representative is reading an article in a popular magazine about the advantages of tax deferral in retirement planning. There is a note that reprints of the article are available. In order to send these reprints to existing and prospective customers,
Member alterations to the contents are only to make it consistent with applicable regulatory standards or to correct factual errors.
Approval by a principal is required within 10 days after first use.
The name of the underwriter who commissioned the article must be prominently displayed.
Filing a copy with FINRA is required.
A due diligence meeting occurs between
the FINRA member firm and FINRA's Corporate Finance Department to discuss the fairness of the underwriting spread on a pending public offering.
The issuing corporation and the underwriters to review and re-examine the full details of the pending underwriting and negotiate final terms to be included in the formal underwriting contract.
All of these.
The underwriter and the SEC before the issuance of a final prospectus to insert the public offering price and make any last-minute changes at the SEC's request.
In a new municipal bond offering, which of the following orders is placed after the bid is awarded and credits the entire syndicate with the takedown?
Presale
Group
Member
Designated
Within a firm commitment underwriting, which document details the responsibilities and liabilities of each firm?
Registration statement
Underwriting agreement
Letter of intent
Agreement among underwriters
XYZ Corporation is preparing a registration statement for a new issue consisting of 300,000 new shares and 200,000 existing shares held by officers. The offering price is 2 per share. After the offering is complete, XYZ will receive
$14,000,000
$9,000,000.
$8,400,000.
$15,000,000.
Better Bond Sales (BBS) is the syndicate manager of new GO municipal bond issue. Should BBS sell some of the bonds, its earnings would be
The total takedown.
Negotiated between the issuer and the manager.
the spread.
The spread plus the manager's fee.
New issue municipal bond orders are allocated according to priorities the syndicate sets in advance. The MSRB requires syndicates to establish priority allocation provisions for orders. Which of the following is the most common priority?
Presale, designated, group net, member
Member, designated, presale, group net
Presale, group net, designated, member
Group net, presale, designated, member
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