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52 Cards in this Set
- Front
- Back
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Rulings under the Code of Arbitration Procedure: |
are binding on all parties
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A customer sells short 500 XYZ at $80 a share in a margin account. Prior to regular way settlement, if the stock falls to $60 a share, the maximum maintenance margin requirement is: |
9000 |
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If a US corporation exports machine tools to Switzerland and will be paid in Swiss francs, to protect against foreign-exchange risk it should: |
buy SF calls |
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The board of ABC has voted to pay a $0.32 dividend to holders of its common stock. These dividends will be paid from: |
retained earnings |
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Which of the following would be most likely to require a mandatory sinking fund? |
A water and sewer revenue bond |
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Regulations regarding how contributions are made to tax-qualified plans relate to which of the following ERISA requirements? |
Funding
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An options trder establishes the following positions:
Long 10 ALF Apr 40 calls at 6 Short 10 ALF Apr 50 calls at 2
What is the client's maximum gain and loss per share? |
Gain 6, loss 4 |
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Automatic exercise will occur for equity options at expiration that are in-the-money by at least: |
0.01 |
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An 18 year old, unmarried high school student sought a safe investment for a $30,000 bequest until after she graduated from college. Her intent was to use the funds for the down payment on a house after graduation.her agent recommend she choose a variable annuity as a safe haven for the funds. this recommendation is: |
unsuitable because her situation exposes her to surrender charges and early withdrawal penalities in exchange for insufficient benefits |
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All of the following securities are exempt from the Trust Indenture Act of 1939 EXCEPT: a. preferred stock b. debentures c. municipal bonds d. treasury bonds |
debentures |
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The common stock of ABC corporation currently earns $3 per share. if the price-to-earnings ratio for this stock is 14, what is the current market price? |
42 |
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Which of the following best describes how a syndicate determines the amount to bid for a new muncipal issue? |
The average reoffering price minus the spread |
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A municipal bond transaction is labeled T+3. This means that: |
the trade is settled regular way in 3 business days |
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Muncipal securities issued by which of the following are triple-tax exempt? |
US territories |
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ABC corporation has declared a record date of Thursday, May 17, for its next quarterly cash dividend. When is the last day the investor may purchase the stock regular way and receive the dividend? |
Monday, May 14 |
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The market attitude of an investor with no other position who writes an at-the-money put is: |
bullish/neutral |
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If a client who seeks diversification through real estate is concerned about illiquidity associated with investing in real estate, which of the following is most suitable? |
Real estate investment trust |
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A customer tells a broker to buy 1,500 shares of ABCD at 33.60 immediately for the full 1500 shares. This is a(n): |
fill or kill order |
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A municipal broker/dealer has hired an individual to work as a registered representative for their municipal business. During the first 90 days of employment, the municipal broker/dealer's new hire may: |
take the required licensing exam |
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If an OTC market maker provides a firm quote to another broker/dealer then refuses to buy or sell at the price quoted, the market maker is said to be: |
backing away |
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The current market in XYZZ stock is 6.12 bid, offered at 6.18. A customer wants to bid 6.125 for 100 shares. How should the buy order ticket be read? |
6.12 bid |
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What are the 4 phases of common stock? |
1. authorized 2. issued 3. treasury stock 4. outstanding |
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Five directors will be elected at the annual meeting of CDE. Under the cumulative voting system, an investor with 100 shares of CDE would have |
500 votes that he could cast in any way he chooses among 5 directors |
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Who is responsible for ensuring that a corporation does NOT have more shares of stock outstanding than it has been authorized to use? |
registrar |
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A client has 100 shares of GHI when the stock undergoes a split. After the split, the client has |
no effective change in the value of the position |
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An ADR represents |
a foreign security in a domestic market |
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If a company dividend remains unchanged but current market value goes down, what effect will that have on current yield? |
current yield goes up |
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What are the 4 investment grade bonds? |
Aaa Aa A Baa |
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What are the high risk/high yield bonds? |
Ba B Caa Ca C |
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What is a eurobond? |
Issued outside the country and currency of the issuer issued in bearer form, interest paid once per year, payable in any currency EXCEPT US DOLLARS |
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Which of the following debt securities would one normally find the highest yield? |
Corporations |
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A bond purchased at $900 with a 5% coupon and a 5-year maturity has a current yield of |
5.6% |
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A 5% bond is trading at a premium. Which would be the bond's highest yield? |
Coupon Yield |
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If a bond has a call provision, this will tend to |
place a ceiling on how high the price will increase |
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Accrued interest on a bond confirmation is |
added to the buyers contract price and added to the sellers contract price |
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When reviewing a normal yield curve, you notice |
long-term yields are higher than short-term yields |
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What is the order of Liquidation Priority?
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1. Wages 2. taxes 3. secured bonds 4. debentures 5. general creditors 6. subordinated debentures 7. preferred stock 8. common stock |
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A parent corporation has guaranteed the debt of one of its subsidaries. These bonds are known as |
guaranteed bonds and unsecured bonds |
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A bond is convertible at $25. the market value of the stock is $30. What is the parity price of the bond? |
1200. |
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Which of the following choices lists Treasury bills, treasury bonds, and Treasury notes in ascending order of maturity? |
Bills, notes, bonds |
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What are the two basic risks fo Collateralized Mortgage Obligations (CMOS)? |
prepayment extension risk |
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Short-term money market instruments guaranteed by a bank that are used to provide capital for exporters to foreign countries are called: |
Banker's acceptances (BAs) |
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A statutory debt limitation restricts a municipality's authority to |
issue general obligation (GO) bonds |
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A special taxx bond receives revenue to pay bondholders from all of the following sources Except: a. tobacco tax b. ad valorem tax c. gasoline tax d. hotel tax |
b. ad valorem tax |
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TANs, RANs, and BANs are issued by municipalities seeking |
short-term financing |
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Several municipal syndicates submit bids to underwrite a new municipal bond issue. the winning syndicate's bid will have |
the lowest net interest cost (NIC) to the municipality |
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A municipal issuer publishes an official notice of sale to indicate that the offering will be made |
on a competitive basis |
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if you buy put, you want |
to go down |
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In the money is called |
intrinsic value. |
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Bullish means |
buy call, sell put |
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Bearish means |
Buy put, sell call |
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What is the maximum length of time option can be written is |
9 months and it expires |
