Frequently Missed

an economic slowdown

A bond analyst notices that the yield spread between corporate bonds and government bonds is widening. This is typically predictive of

loan out the customer's margin securities

A customer opens a margin account with a broker-dealer and signs a loan consent agreement. The loan consent agreement allows the firm to

is excluded from the definition of investment adviser under federal law and is, therefore, exempt from state registration requirements.

A person who renders investment advice solely with respect to securities issued by the U.S. government

CDs

All the following securities are issued at a discount except

$1,200

An adviser's financial impairment must be disclosed to clients if the adviser has discretion, has custody, or requires prepayment of more than ___________ in fees, six or more months in advance

3 years

BDs must keep records for

5 years

IAs must keep records for

15 days

If the Administrator has summarily suspended an investment adviser representative's registration, the registrant may request a hearing by written request and the hearing will be granted within

federal, state, and local governments

Interest on foreign bonds is taxed in the United States by

immediately obtain a surety bond rounded to the next $5,000 to meet that level

State-registered investment advisers who maintain custody of customer funds or securities must have a minimum net worth of $35,000. If the net worth should fall below that amount, the firm must

price-weighted index

The Dow Jones Industrial Average is a

excess return earned compared to its total risk

The Sharpe ratio measures a stock's

corporate qualified plans, such as the defined benefit or defined contribution plan

The investment policy statement (IPS), although not required under Department of Labor (DOL) rules, is generally found in

opened end and closed end investment companies

Under the Investment Company Act of 1940, which of the following are considered management companies?

broker-dealers and agents

Unless qualifying for an exemption, __________ must be registered in each state where offers or sales occur.

TRUE!!!

agents do not have financial requirements

Structured products

are created as a tool to meet the issuer's debt financing needs when they will result in a lower cost than a standardized financial instrument available in the market place.

nonvariable insurance policies

are not securities

total return

best measurement of a security's performance

3 years

website retention from initial use is

preferred stock

An investor holding which of the following equity securities would not expect to have preemptive rights?

above, below, or the same as the NAV

Because the pricing of a closed-end fund is independent of its NAV, the market price could be

banks, insurance and investment companies, and certain employee benefit plans

Institutional investors include

semiannually

Investment companies must send financial reports to shareholders

A donor advised fund

One of your customers would like to be able to reduce current taxable income. Contributions to which of the following would be an appropriate recommendation?

future value

The anticipated interest rate, the present amount to be invested, and a time period for the life of the investment are required to calculate the

pricing securities based on their systematic risk

The capital asset pricing model (CAPM) is an investment theory that serves as a model for

the capital appreciation plus the dividend income received over the period

The holding period return (HPR) on a share of stock is equal to

adding the sales charge to the NAV. An open-end fund can never have an ask (or offering) price that is less than its NAV, therefore ABC cannot be an open-end fund

The price for open-end funds is determined by

commissions; markups and markdowns; and advisory fees for those firms that are also registered as investment advisers.

There are three primary expenses involved with brokerage accounts that are not included in the fee disclosure template. Those are

As ordinary income based on an exclusion ratio

When a customer wants income from an annuity and chooses the option of life with 20-year period certain, how will distributions be taxed?

inflation

Which of the following risks most likely would be reduced as a result of the addition of tangible assets to an investor's portfolio?

Revocation of the registration of that agent's broker-dealer will result in that agent's effective registration being put on hold.

Which of the following statements regarding an agent's registration is correct?

advisors to private funds, foreign private advisors, and advisors to venture capital funds

exempt from registration with states

an anchoring bias

is when people tend to base their decisions on reference points that are often arbitrarily chosen

not a security in itself

keogh plan is

$100 million in 13(f) securities

An institutional money manager with at least ___________ under discretionary management is required to file Form 13F. This form must be filed within 45 days of the end of the quarter.

cyclical stocks

An investment adviser who believes that we are in the early recovery portion of the business cycle would most likely recommend

there are no transaction costs or taxes

One of the assumptions underlying the capital asset pricing model is that

Both the agent and the former broker-dealer are required to notify the Administrator promptly.

The license of an agent expires when she ceases to be employed by the broker-dealer or issuer for whom she was previously licensed.

45 days

Under the Investment Advisers Act of 1940, an adviser's registration usually becomes effective how many days after it is filed?

Beta

___________ is a measure of relative systematic risk for stock or portfolio returns

Chief compliance officer of the IA

The Investment Advisers Act of 1940 requires advisers to prepare and adhere to a code of ethics. Which of the following is charged with the responsibility of enforcing that code?

face amount certificate companies

The Investment Company Act of 1940 requires certain types of investment companies to compute their net asset value on a regular basis. Excluded from this requirement are

subtracting total liabilities from total assets

When reviewing a corporation's financial statements, shareholders' equity is computed by

Time-weighted return

Which of the following is generally believed to present a more accurate picture of a portfolio manager's performance?

moving average

Which of the following is used in technical analysis in an attempt to modify fluctuations of stock prices over the long term into a smoothed trend?

commissions; markups and markdowns; and advisory fees for those firms that are also registered as investment advisers.

here are three primary expenses involved with brokerage accounts that are not included in the fee disclosure template. Those are

The efficient market hypothesis

states that an investor cannot consistently outperform the market.

Future value

the amount your original deposit will be worth in the future based on earning a specific interest rate over a specific period of time