Last Chance series 65
A 3x leveraged fund priced at $42 tracks an index that is up 2% one day and then down 3% on the next day. What should this fund be approximately priced at following these two volatile days? (You solved it easy) A) $40.50 B) $41.55 C) $43.18 D) $45.86
A
A corporation ends its accounting year on September 30. It would be correct to state that it uses A) a fiscal year. B) an alternative year. C) a nine-month year. D) an accounting year.
A
ABC Manufacturing Company is in the business of making high-quality machine tools. Which of the following would be included in ABC's cash flow from financing activities? A) Payment of cash dividends B) The sale of XYZ Lathe Manufacturing bonds C) The purchase of a new building to store inventory D) The purchase of a new computer-driven lathe
A
All the following securities are issued at a discount except A) CDs. B) Treasury bills. C) commercial paper. D) zero-coupon bonds.
A
An intrastate offering is exempt from A) federal registration. B) state registration. C) blue-sky registration. D) all registrations.
A
As defined in the Uniform Securities Act, an issuer is any person who issues, or proposes to issue, a security for sale to the public. Based on that definition, which of the following is not an issuer? A) A partner in the AAA Oil and Gas Partnership selling his interest in the investment B) AAA Manufacturing Company, which proposes to offer shares to the public but has not completed the offering C) The City of Chicago, which is involved in a distribution of tax-exempt highway improvement bonds D) The U.S. government announcing an offering of 20-year Treasury bonds
A
Asset-based sales charges will generally be lowest when holding which of the following mutual fund share classes? A) Class A shares B) Class R shares C) Class C shares D) Class B shares
A
It is not uncommon to find a fixed-income security issued with a call feature. The feature is usually of most benefit to A) the issuer. B) the investor. C) the underwriter. D) the transfer agent.
A
The Conference Board, a nongovernmental nonprofit organization, regularly publishes a list of economic indicators. Which of the following would be included in their list of leading indicators? A) Average weekly initial claims for unemployment insurance B) Manufacturing and trade sales (in constant dollars) C) Average duration of unemployment D) Average prime rate
A
The chief compliance officer (CCO) of a registered investment adviser would generally not have responsibility for the actions of A) an agent registered with an affiliated broker-dealer. B) supervisory personnel of the firm. C) an investment adviser representative of the firm. D) ministerial personnel of the firm.
A
The value of which of the following would be least likely to be impacted by changes in interest rates? A) A bank CD maturing in 5 years B) A U.S. Treasury bond issued 25 years ago with a 30-year maturity C) A convertible preferred stock D) A laddered bond portfolio
A
Under which of the following circumstances will a private placement fail to qualify for exemption from registration under the Uniform Securities Act? A) A modest commission is paid to the agents who sell the offering to noninstitutional clients. B) The offer is directed to only five individuals during any 12-month period. C) A bank holding company purchases the offering for trading purposes rather than investment purposes. D) The seller reasonably believes that individual purchasers are buying for investment purposes rather than immediate resale.
A
Which of the following commodities is least likely to be affected by the weather? A) Silver B) Pork bellies C) Orange juice D) Wheat
A
Which of the following rates of return is used by investment professionals as the risk-free rate? A) 91-day Treasury bill rate B) Discount rate C) Prime rate D) Federal funds rate
A
Which of the following usually does not pay interest semiannually? A) GNMA B) Public utility bond C) Treasury bond D) Treasury note
A
Your client has turned bearish on the market, but does not have a margin account. Which of the following securities would probably best meet your client's needs? A) An inverse fund B) An interest rate swap C) A long call option D) A balanced mutual fund
A
ABC Corporation has a 10% noncumulative preferred stock outstanding at $100 par value. Two years ago, ABC omitted its preferred dividend, and last year, it paid a dividend of $5 per share. To pay a dividend to common shareholders this year, each preferred share must be paid a dividend of A) $25. B) $10. C) $15. D) $5.
B
An application to register securities may be filed under the Uniform Securities Act by any of these except A) a broker-dealer acting on behalf of the issuer. B) an agent of a broker-dealer. C) an issuer. D) a person on whose behalf the offering is made.
B
For which of the following is there no active secondary market? A) Options B) Forward contracts C) ETFs D) Futures contracts
B
GHI currently has earnings of $4.00 and pays a $0.50 quarterly dividend. If GHI's market price is $40.00, the current yield is A) 15.00%. B) 5.00%. C) 10.00%. D) 1.25%.
B
The term Eurodollars refers to A) European currency held in U.S. banks. B) American dollars held by banks in other countries, especially in Europe. C) a worldwide currency system that is expected to someday replace existing currency systems. D) obsolete currency that was formerly backed by the gold standard.
B
Under Rule 144, which of the following sales are subject to volume limitations? I Control person selling registered stock held for one year II Control person selling restricted stock held for two year III Nonaffiliate selling registered stock held for one year IV Nonaffiliate selling restricted stock held for two year A) III and IV B) I and II C) I and III D) II and IV
B
Under the Investment Company Act of 1940, an investment company may initially retain the services of an investment adviser only with approval of the majority vote of A) the outstanding shares. B) the outstanding shares and a majority of that portion of the board of directors that is considered noninterested members. C) the board of directors. D) the noninterested directors.
B
Which of the following is a direct obligation of the U.S. government? A) Government bond mutual funds B) Ginnie Maes C) Fannie Maes D) Bank for cooperatives bonds
B
Which of the following is correct regarding zero-coupon bonds? A) They sell at a premium. B) They eliminate reinvestment rate risk. C) They have low interest rate risk. D) They offer minimum price volatility.
B
Which of the following would not be considered derivatives? A) Forwards B) ETFs C) Options D) Warrants
B
You have a client who originally invested $25,000 into the ABC Growth Fund. Over the past five years, there have been no distributions and the value of the shares is now $35,000. If the client should ask about exchanging the entire holding for shares of the ABC Income Fund, you would explain that A) the new shares would be acquired at the public offering price. B) there is a long-term capital gain of $10,000. C) taking advantage of the exchange privilege results in taxes being deferred until the liquidation of the account. D) the new shares will have the same cost basis as the old ones.
B
All of the following statements regarding exchange-traded funds (ETFs) are correct except A) ETFs can be bought on margin. B) ETFs trade based on supply and demand for the shares rather than their NAV. C) ETFs may not be sold short. D) ETFs may be passively managed.
C
All of the following would flow through as a loss to limited partners except A) accelerated depreciation. B) interest payments on partnership debt. C) principal repayment on partnership debt. D) depletion.
C
George owns XYZ stock. Based on recent analyst projections and George's own research, he believes XYZ's price will remain flat over the next few months. Accordingly, which strategy would George most likely employ? A) Sell a put option. B) Buy a warrant. C) Sell a call option. D) Buy a call option.
C
Several years ago, an investor purchased an investment-grade bond with a 6% coupon. Today, that bond is priced to yield 4.6% to maturity in five years. If the bond is called at par in one year, the bond's yield will be A) 4.6%. B) more than 4.6%. C) less than 4.6%. D) the coupon rate of 6% because it is called at par value.
C
Which of the following is not included in Form ADV Part 2A? A) Investment policy of the adviser B) Types of investments made by the adviser C) States in which the investment adviser is registered or intends to register D) A description of how the adviser is compensated
C
A client is considering the purchase of American depositary receipts (ADRs). The client is looking to further diversify her portfolio. Which of the following is not a feature of this type of investment vehicle? A) Information regarding the foreign company is more easily attainable than if directly purchased. B) ADRs are denominated and pay dividends in U.S. dollars. C) ADRs are both liquid and marketable. D) They are not subject to exchange rate, or currency, risk.
D
A customer owns cumulative preferred stock (par value of $100) that pays an 8% dividend. The dividend has not been paid this year or for the two previous years. How much must the company pay the customer per share before it may pay dividends to the common stockholders? A) $0 B) $16 C) $8 D) $24
D
All of the following statements regarding incentive stock options (ISOs) are correct except A) if the holding period is satisfied, the gain upon the sale of ISO shares will be a long-term capital gain B) upon the exercise of an ISO, income for AMT purposes is created C) the exercise of ISOs does not create taxable income D) the favorable tax treatment associated with ISOs is lost if the shares acquired through the ISO exercise are sold before 1 year from the date of grant or 2 years from the date of exercise
D
All of the following would flow through as a loss to limited partners except A) depletion. B) accelerated depreciation. C) interest payments on partnership debt. D) principal repayment on partnership debt.
D
If near-term liquidity is the only objective for a client, which of the following pairs of investments represents the most/least liquid? A) 10-year corporate bonds/U.S. T-bills B) Variable annuity accumulation unit/money market mutual fund shares C) Annuity units of a variable annuity/unit in a direct participation program (DPP) D) Common stock listed on the New York Stock Exchange/unit in a direct participation program (DPP)
D
Kapco Advisers, a federal covered investment adviser operating on a calendar-year basis, published a list of recommended securities in January 2017. A copy of this must be maintained until at least A) January 31, 2019. B) December 31, 2019. C) January 31, 2022. D) December 31, 2022.
D
The writer of a call option A) pays the premium. B) is obligated to buy the underlying asset. C) has the right to sell the underlying asset. D) receives the premium.
D
Which of the following are subject to the holding period requirements of Rule 144 of the Securities Exchange Act of 1934? Registered securities held by a control person Unregistered securities held by a noncontrol person Registered securities held by a noncontrol person Unregistered securities held by a control person A) I and IV B) II and III C) I and III D) II and IV
D
Which of the following statements regarding corporate zero-coupon bonds is true? A) They have lower price volatility than other bonds. B) Interest is paid semiannually. C) They are beneficial for investors in higher tax brackets. D) The discount is in lieu of periodic interest payments.
D
Which of the following statements represents an advantage of a municipal general obligation (GO) bond over a revenue bond? A) A GO bond issuer is required to conduct a feasibility study. B) Only a facility's users pay for a GO bond. C) A GO bond is not charged against the municipality's borrowing limits. D) A GO bond generally involves less risk to the investor.
D
Your client with $100,000 to invest is looking for maximum current income. Which of the following would offer the highest current return? A) $100,000 AA rated corporate bonds trading at par with a 6% coupon rate B) $200,000 of utility common stock paying a current dividend of 3.5% C) $100,000 of zero-coupon bonds with a yield to maturity of 6% D) $100,000 market value of corporate bonds selling at a premium and yielding 6% to maturity
D
How do you find after tax yield
Pre tax return (1-Tax Bracket)
What secures a general obligation bond
Taxes
Among the characteristics of leveraged exchange-traded funds is that A) leveraged ETFs may be purchased on margin. B) leveraged ETFs generally obtain the leverage through bank borrowing. C) they are generally suitable for investors with a long time horizon. D) they can only be sold to accredited investors.
A
Which of the following statements is true regarding the jurisdiction of the SEC under the Securities Exchange Act of 1934? The SEC has jurisdiction over exchanges and SROs. The SEC has jurisdiction over broker-dealers, investment advisers, and associated persons that are required to be registered under federal law. The SEC has jurisdiction over banks and savings and loans regarding their securities activities. A) I and II B) I only C) II only D) I, II, and III
A
XYZ Corporation's A-rated convertible debenture is currently selling for 90. If the bond's conversion price is $40, what is the parity price of the stock? A) $36.00 per share B) $44.00 per share C) $40.00 per share D) $22.50 per share
A
Richard purchased a 30-year bond for 103½ with a stated coupon rate of 8.5%. What is the approximate yield to maturity for this investment if Richard receives semiannual coupon payments and expects to hold the bond to maturity? A) 9.36% B) 8.19% C) 8.68% D) 8.50%
B
The DERP Corporation has an outstanding convertible bond issue that is convertible into eight shares of stock. If the current market price of the bond is 80, the parity price of the stock is A) $80 per share. B) $100 per share. C) $125 per share. D) $64 per share.
B
s defined in the Uniform Securities Act, an issuer is any person who issues, or proposes to issue, a security for sale to the public. Based on that definition, which of the following is not an issuer? A) The U.S. government announcing an offering of 20-year Treasury bonds B) A partner in the AAA Oil and Gas Partnership selling his interest in the investment C) The City of Chicago, which is involved in a distribution of tax-exempt highway improvement bonds D) AAA Manufacturing Company, which proposes to offer shares to the public but has not completed the offering
B
The DERP Corporation has an outstanding convertible bond issue that is convertible into eight shares of stock. If the current market price of the bond is 80, the parity price of the stock is A) $80 per share. B) $64 per share. C) $100 per share. D) $125 per share.
C
The bond document that states the issuer's obligation to pay the investor a specific rate of interest for the use of the funds as well as any collateral pledged as security for the loan and all other pertinent details might be referred to by all of these terms except A) the indenture. B) the deed of trust. C) the bond contract. D) the debenture.
D
Which of the following best describes the liquidation order when a company files for bankruptcy? Common stockholders Debenture holders Preferred stockholders Secured creditors A) III, IV, II, I B) I, II, III, IV C) IV, III, II, I D) IV, II, III, I
D
An 8% corporate bond is offered on an 8.25 basis. Which of the following statements are true? Nominal yield is higher than YTM. Current yield is higher than nominal yield. Nominal yield is lower than YTM. Current yield is lower than nominal yield. A) II and III B) I and III C) I and IV D) II and IV
A
An investor is long stock in a cash account and does not expect the price to change in the immediate future. His best strategy to generate income may be to A) sell a call. B) buy a put. C) sell a put. D) buy a call.
A
An investor reading the open-end investment company section of today's The Wall Street Journal sees that Bull in the Teashop Fund has a NAV of $10.65 and an offering price of $11.15. He knows that he would have received which of the following if his redemption order had been received by the fund prior to yesterday's market close? A) $10.65, less redemption fee, if any B) $10.65 C) $11.15, less redemption fee, if any D) $10.65, less commission
A
Under the Investment Company Act of 1940, purchases by which of the following are eligible for the reduced sales charges applicable at the fund's stated breakpoints? A qualified retirement plan The combined purchases of a man and a custodial account for his daughter where his wife, not he, is the custodian Two friends who have pooled their money to make a large purchase An investment club A) I and II B) III and IV C) I and III D) II and IV
A
Which of the following is the least suitable mutual fund transaction? A) Encouraging a mutual fund shareholder to switch from one fund family to another while a deferred load is in existence B) Encouraging an investor in his early 30s to invest in an emerging markets mutual fund C) Encouraging an investor in a high tax bracket with an income objective to invest in a municipal bond fund D) Encouraging a retired 65-year-old investor to invest a small percentage of his savings in a large-cap growth fund
A
Which of the following persons must register as an investment adviser under the Uniform Securities Act? A) An investment adviser who only serves institutional clients and whose only office is in this state B) An investment adviser whose advice is limited to securities issued or guaranteed by the U.S. government and who has three places of business in the state C) An investment adviser representative with no place of business in the state who has dealt with seven retail clients during the most recent 12 months D) An accountant who makes no pretense of providing investment advisory services but gives incidental advice to clients as a small part of accounting services provided
A
Your client calls you after reading a story in the business section of his local newspaper. It seems that the article focused on changes to the core CPI, and the client wants to know how that is different from the normal CPI. You should explain that it is A) the Consumer Price Index, excluding energy and food prices. B) the Consumer Price Index, excluding housing and automobiles. C) the figure used to determine annual increases, if any, to Social Security benefits. D) the total of the leading indicators, excluding stock prices.
A
All of the following statements regarding bonds selling at a discount are correct except A) they will appreciate more than comparable bonds selling at a premium if interest rates fall. B) they are more likely to be called than comparable bonds selling at a premium. C) they can indicate that the issuer's credit rating has fallen. D) they can indicate that interest rates have risen.
B
Among the restrictions placed on open-end investment companies by the Investment Company Act of 1940 are I mutual funds are only allowed to maintain joint accounts with other funds that are members of the same "family" of funds II no public offering may commence unless the fund has at least $100,000 in net assets III no registered investment company may own more than 3% of the voting shares of another registered investment company IV shares of the fund will not have any margin loan value until the 30th day after purchase A) II and IV B) II and III C) III and IV D) I and III
B
A bond of standard size has a nominal yield of 6%, paid in the customary fashion. The bond matures in 10 years, is callable at $105 in 5 years, and is currently priced at $110. An investor calculating the bond's yield to call would include A) 20 payment periods. B) the gain of $50 when called. C) the semiannual interest payments of $30. D) the loss of $100 at maturity.
C
A bond with a par value of $1,000 and a coupon rate of 5%, paid semiannually, is currently selling for $1,200. The bond matures in 10 years and is callable in six years at 103. In the computation of the bond's yield to call, which of the following would be a factor? A) Present value of $1,030 B) Future value of $1,200 C) Interest payments of $25 D) 20 payment periods
C
A bond with a par value of $1,000 and a nominal yield of 6% paid semiannually is currently selling for $1,300. The bond matures in 25 years and is callable in 15 years at $1,080. In the computation of the bond's yield to call, which of these would be a factor? A) 50 payment periods B) Future value of $1,300 C) Interest payments of $30 D) Present value of $1,080
C
A client invests $100,000 in a commercial real estate venture taking a 10% interest as a limited partner. Unfortunately, the demand for new office space deteriorates and the partnership is unable to meet the mortgage payments. The end result is foreclosure with a net loss of $2 million. This would have the effect of: A) requiring the client to pay his share of the loss to the creditors. B) a potential claim against the agent who sold the client this program. C) giving the client a passive loss of $100,000. D) giving the client a passive loss of $200,000.
C
In a mutual fund portfolio, you might find all of the following except A) index options. B) junk bonds. C) a short stock position. D) preferred stock.
C
A company that has issued cumulative preferred stock A) pays the preferred dividend before paying the coupons due on its outstanding bonds. B) pays the current dividends on the preferred, but not the past dividends on the preferred, before paying a dividend on the common. C) forces conversion of the preferred that is trading at a discount to par, thereby eliminating the need to pay past-due dividends. D) pays past and current preferred dividends before paying dividends on common stock.
D
For which of the following is there no active secondary market? A) ETFs B) Options C) Futures contracts D) Forward contracts
D
If XYZ is a registered broker-dealer with its lone office located in State T, under which of the following circumstances must it also register in State L? I XYZ's only dealings in State L are directly with issuers of securities in State L. II XYZ engages in extensive transactions with the largest insurance company in State L. III XYZ routinely sells nonexempt securities to extremely high net-worth residents of State L. IV XYZ purchases exempt securities from extremely high net-worth residents of State L for resale to residents of State T. A) I only B) I and II C) II, III, and IV D) III and IV
D
One reason for including commodities in an investment portfolio is because they have a high correlation to A) the U.S. dollar. B) the bond market. C) the stock market. D) the inflation rate.
D
Ginnie Mae pass-throughs will pay back both principal and interest A) monthly. B) quarterly. C) annually. D) semiannually.
A
Which of the following statements regarding letters of intent used in connection with mutual fund purchases are true? I The letter can cover a period totaling 16 months. II The letter may be backdated 90 days. III Some shares purchased are held in escrow until the letter is completed. IV During the period covered by the letter, the customer may not redeem his shares. A) II and III B) III and IV C) I and IV D) I and II
A
A common measurement used to evaluate attitudes regarding future economic conditions is the difference in yields between U.S. Treasury bonds and corporate bonds. This is known as A) a yield spread. B) the Consumer Price Index. C) a yield curve. D) a business cycle.
B
A customer bought a 10-year 6% AAA bond at par when it was issued. Two years later, if the CPI has increased from 2% to 4%, the price of the bond most likely A) cannot be determined. B) has declined. C) has stayed at par. D) has increased.
B
ABC Investment Company shares are trading at $13.80 on a per-share basis. The net asset value (NAV) per share is $12.00. Which of the following conclusions correctly defines the relationship between trading price and NAV? A) NAV per share is calculated as per-market demand and supply for the fund's shares. B) The fund's shares are trading at a discount of 15% to underlying NAV. C) The value of $13.80 is calculated as total assets minus total liabilities divided by total outstanding shares. D) The fund's shares are trading at a premium of 15% to the NAV.
D
The Investment Advisers Act of 1940 would consider each of the following investment advisers to be exempt from registration except A) an adviser whose only clients are banks. B) an adviser who maintains an office in only one state, advises only residents of that state (none of whom is a private fund), and gives advice relating solely to securities not traded on any national exchange. C) an adviser whose only clients are insurance companies. D) an adviser whose only clients are venture capital funds.
A
The investment adviser under contract to a regulated, diversified, open-end investment company does not A) change investment objectives that he believes are in the best interest of the investors. B) make sure the fund invests in such a manner as to retain its diversified status. C) investigate the tax status of potential investments. D) attempt to fulfill the fund's investment objective by means of careful investing.
A
Under Rule 144, which of the following sales are subject to volume limitations? Control person selling registered stock held for one year Control person selling restricted stock held for two year Nonaffiliate selling registered stock held for one year Nonaffiliate selling restricted stock held for two year A) I and II B) II and IV C) I and III D) III and IV
A
An issuer properly files Form D in accordance with Rule 503 of Regulation D of the Securities Act of 1933. As such, the securities that are the subject of any transaction are A) federal covered securities. B) required to register with the state(s) in which they are sold. C) required to register with the SEC. D) available only to institutional purchasers.
B
If general interest rates increase, the interest income of a bond unit investment trust will probably A) decrease. B) remain the same. C) increase. D) change as soon as the portfolio manager can take advantage of the higher rates now available in the marketplace.
B
Which of the following is not exempt from registration as an investment adviser representative in the state in which they conduct business? A CERTIFIED FINANCIAL PLANNER™ who, while affiliated with a broker-dealer and an investment adviser, prepares comprehensive financial plans and whose only compensation is commissions generated from the purchase of recommended securities An insurance agent affiliated with the company's advisory division, who prepares comprehensive financial plans and receives compensation only on insurance products purchased by his clients A broker-dealer with extensive business in the state A mutual fund company with offices and clients in the state A) I only B) I and II C) I, II, III, and IV D) III and IV
B
A client plans to purchase a home within the next three months and will require $100,000 for the down payment. The client has the money in her DDA and asks you for your recommendation as to the best place to put the money. Your recommendation would probably be for the client to A) purchase a GNMA for the monthly income. B) use the money to buy IPOs until the home is purchased. C) keep the money where it is. D) move the money into a 1-year CD.
C
An issuer wishing to comply with Regulation D of the Securities Act of 1933 must file Form D with the SEC A) no fewer than 20 days prior to the first expected date of sale. B) no later than the time of the first sale. C) no later than 15 days after the first sale. D) no later than 30 days after the first sale.
C
If a group of money managers was having a discussion and the term SOFR was mentioned, the topic would most likely be A) long-term borrowing rates. B) current economic conditions in Liberia. C) short-term borrowing rates. D) contract negotiations with the employee's union.
C
In search of higher returns, many investors have turned to alternative investments, such as structured products. Non-exchange-traded structured securities products (SSPs) typically have A) a place in the portfolio of conservative investors. B) FDIC insurance coverage. C) some form of embedded derivatives. D) moderate liquidity.
C
In search of higher returns, many investors have turned to alternative investments, such as structured products. Non-exchange-traded structured securities products (SSPs) typically have A) a place in the portfolio of conservative investors. B) moderate liquidity. C) some form of embedded derivatives. D) FDIC insurance coverage.
C
Investing in which of the following would maximize after-tax income and diversify the portfolio for a high-tax-bracket investor? A) Preferred stock mutual fund B) Short-term municipal notes C) A unit investment trust whose portfolio consists of municipal bonds D) GNMAs
C
One of your customers called you on Wednesday at 8:00 am ET and asked you to buy $10,000 of the Liberty Balanced Fund Class A shares. If the Wednesday morning financial pages show the fund's NAV to be $45.83 and the POP to be $48.24 and the Thursday morning quote shows the NAV as $46.22 and the POP as 48.65, what is the price per share for this purchase? A) $48.24 B) $45.83 C) $48.65 D) $46.22
C
One way in which incentive stock options (ISOs) differ from nonqualified stock options (NQSOs) is that A) there is a maximum five-year limit for exercise on the ISO, while the time limit on the NQSO is 10 years. B) gains on an ISO are always short term, while those on an NQSO are long term. C) the bargain element of the ISO is an AMT preference item. D) the bargain element of the ISO is reported as wages on the tax returns of the employer and the employee.
C
The RAN Corporation's common stock is listed on the New York Stock Exchange. To raise additional working capital, RAN's board of directors has authorized the sale of $75 million in subordinated debentures. Under the Uniform Securities Act, which of the following is not a true statement? A) The Administrator may require a filing fee to be paid prior to sales taking place in the state. B) The Administrator can bring an enforcement action against the issuer if it is deemed that the issue is fraudulent. C) The Administrator can require the RAN Corporation to register the debentures prior to an offering in the state. D) The Administrator can require that the issuer provide a notice filing in the state.
C
The board of directors of DDC omitted dividends in 2020 on their $100 par 6% noncumulative preferred stock. In 2021, a $2 preferred dividend was paid. For DDC, 2022 has been a good year, and the board wishes to pay a common dividend. How much must be paid per share on the preferred for 2022 in order to pay a common dividend? A) $16 B) $12 C) $6 D) $8
C
According to the Uniform Securities Act, which of the following is an investment adviser representative? I A clerical employee of the AAA Investment Management Company, an investment advisory firm registered in the state that offers investment portfolio services to the public II An employee of AAA Investment Management Company who is properly registered under the USA and supervises analysts who provide research to clients III An employee of a federal covered adviser with an office in the state who offers investment advice to the public IV An agent of a broker-dealer with strong investment opinions who sells securities only on a commission basis A) I and IV B) I and II C) III and IV D) II and III
D
All of the following statements regarding incentive stock options (ISOs) are correct except A) upon the exercise of an ISO, income for AMT purposes is created B) if the holding period is satisfied, the gain upon the sale of ISO shares will be a long-term capital gain C) the exercise of ISOs does not create taxable income D) the favorable tax treatment associated with ISOs is lost if the shares acquired through the ISO exercise are sold before 1 year from the date of grant or 2 years from the date of exercise
D
An 8% corporate bond is offered on an 8.25 basis. Which of the following statements are true? Nominal yield is higher than YTM. Current yield is higher than nominal yield. Nominal yield is lower than YTM. Current yield is lower than nominal yield. A) II and IV B) I and III C) I and IV D) II and III
D
BC Corporation has a 10% noncumulative preferred stock outstanding at $100 par value. Two years ago, ABC omitted its preferred dividend, and last year, it paid a dividend of $5 per share. To pay a dividend to common shareholders this year, each preferred share must be paid a dividend of A) $15. B) $5. C) $25. D) $10.
D
Louis owns an investment that is an unmanaged portfolio in which the money manager initially selects the securities to be included in the portfolio and then holds those securities until they mature or the investment portfolio terminates. This statement best describes which type of investment? A) Hedge fund B) Closed-end investment company C) Open-end investment company D) Unit investment trust
D
One of your clients calls to tell you that they overheard someone at work talking about investing in NFTs. What do those initials stand for? A) Neuroplastic functional training B) No free ticket C) Nutrition and food technology D) Nonfungible tokens
D
Which of the following securities are exempt from registration at the state level? Issue of a savings and loan association authorized to do business in this state General obligation municipal bond Bond issued by a company that has common stock listed on the NYSE American LLC (formerly known as the American Stock Exchange [AMEX]) A) II and III B) I only C) II only D) I, II, and III
D
