Chap 4 prospect

A customer purchased mutual fund shares with a NAV $7.82 and sales charge 8%. She paid a sales charge of ?

0.68 = 7.82/(100-8) - 7.82

There are retention requirements for certain records of a broker/dealer. One of those is the firm's retail communications files. Under FINRA rules, copies of retail communications must be retained for?

3 years after Last use.

not an retail communication apply to all EXCEPT?

A public appearance.

A prospectus must accompany or precede which of the following ?

A sales presentation held in person at the representative's office, must be face to face meeting.

regard to using a summary prospectus for the sale of a mutual fund?

A statutory prospectus may be delivered after the summary prospectus Electronic delivery of the statutory prospectus is allowed after the sale

Retail communication

Any written or electronic form to customer that are more than 25 retail investors within 30 calendar day.

For an investment company to charge the maximum sales charge of 8.5%, it must offer all of the following EXCEPT?

Conversion privilege, Letter of intent

principal approval before first use?

Form letter sent to 10 prospective retail customers every week 25 retail within 30 days period

Which of the following constitute a public appearance?

Interactive electronic forum. Television interview. involves the personal presence of, or possibility of interacting electronically with and office or other spokesperson of a firm.

Fund underwriter/ sponsors must be FINRA member firms.

Only member firms may receive selling concessions.

no time limit in order to obtain a reduced sales charge for additional investments?

Right of accumulation

A mutual fund must redeem its tendered shares within how many days after receiving a written request for their redemption?

Seven days.

An investor owns $10,000 of shares in ABC bond fund. Due to a change in his financial situation, he wishes to exchange the bond fund shares for shares in ABC's aggressive growth fund. Which of the statements below correctly describes the tax consequences of this action?

The exchange is considered a taxable event that must be recognized in the current year.

Which of the following would prevent a mutual fund with a front- end load from charging as much as 8.5% of POP as a sales charge?

The fund does not offer breakpoints.

Under FINRA rules dealing with communications with the public, a money market mutual fund with a portfolio composed primarily of U.S. government short-term obligations and an NAV that has never varied from $1 per share, may state which of the following?

The fund has a portfolio invested primarily in short-term U.S. government debt instruments for stability of principal and regular interest. Since the inception of the fund, the NAV has never varied from $1. The fund will make every effort to maintain the NAV at $1; however, past performance is not an indicator of future results.

Under which of the following circumstances could a member firm make alterations to an article on securities before using it as an independently prepared reprint?

The member firm could alter the presentation format to make it consistent with regulatory standards. The member firm could correct the reported number of shares being offered if the original article stated the number incorrectly.

Mr. Jones, wants to pay one premium for the variable life insurance policy he is applying for have the contract paid up. his register RR tells hime?

The policy will be issued as a MEC and access to cash values may be subject to taxes and penalties.

An XYZ open ended bond fund advertising its returns must show all of the following EXCEPT?

Total returns quotations based on the most recent calendar year.

Conduct Rules regarding public appearances EXCEPT?

a radio spot saying that your offices have moved. Announcement on television that your firm's offices have moved.

if the member did not prepare the material of charts, graphs, tables,

all illustrations must be approved before uses.

Retail communication submitted by a first year member firm

before 10 days

Level load, asset based distribution fee never diminishes 资产为基础的分配费永不减少

class C

correspondence

less than 25 retail customers. email to 20 existing clients, must reviewed by a principal Before or After the use.

Do not call list

maintained for 10 years, no more than 31 days. from 8am-9pm

Institutional communications

may be reviewed by a principal before or after use

Class B shares

may eventually convert to another share class.

Your firm has prepared some institutional sales material on several of the securities it deals in and has provided it to three mutual funds. One of the fund managers calls your firm to ask for some extra copies of the material, because he would like to send it to some of his investor friends. This request?

may not be complied with if your firm wishes to continue to treat the material as institutional communications.

A FINRA member firm must maintain the public offering price in all the following instances EXCEPT?

member-to-member.

retail communication

more than 25 retail customers. must approved by a principal within 10 days of FIRST use. / Before billboard, from letter to 30 prospective investors. website,

time horizon neutral

no load

A broker/dealer member firm of FINRA would like to conduct business under another name. The use of a DBA is?

permitted if the name is filed with both FINRA and the SEC.

Filing with FINRA is required for mutual fund-related?

retail communication

Regarding communications, filing with FINRA is required for?

retail communication that includes a ranking by an independent entity

All of the following be disclosed in a mutual fund communication containing performance data EXCEPT?

the SEC disclaimer stating that the securities have not been approved or disapproved by the SEC. The no-approval clause must be included in the prospectus.

A generic ad for an investment company placed by a broker/dealer would contain?

the name of the broker/dealer placing the ad, but not the name of the investment company. A specific fund or investment company is not mentioned in generic ads, but the BD who is placing the ad must be named.

Rights of accumulation

this common mutual fund purchasing approach has no time limit in order to obtain a reduced sales charge for additional investments.

Testimonial

used by BD if made that exceeds $100, that fact must be disclosed.

Radio advertisement or research report related to investment companies

within 10 days of first use.