Exam 9

what is age for the 1k catch up for IRAs?

50

Which report carries the shortest time limit?

8-K

An investor purchases two PMJ Dec 16 calls at $.85. If the commission charge is $8, the total cost is?

A premium of 85 cents per share means each contract has a cost of $85. There are two of them making that $170. Adding the $8 commission brings the total to $178

6% bond maturing in 8 years on a 7.33 basis, the price of the bond is above below or at par?

BELOW PAR

an example of market manipulation is?

Creating the illusion of active trading

average based on the prices of only 65 stocks is?

Dow Jones Composite Average

The grantor may be taxed on trust income only if the grantor actually received the income, true or false?

FALSE IDIOT

an investment adviser who maintains custody of client funds and/or securities will be required to complete?

Form ADV-E

If an IAR of a fed IA that transacts business in a state terminates employment with that investment adviser, what must happen?

IAR notifies admin

IPS includes?

Investment objectives/ Investment philosophy/Investment selection criteria/Monitoring procedures

characteristics of negotiable jumbo CDs?

Issued in amounts of $100,000 to $1 million or more/Trade in the secondary market

can the SEC suspend trading on specific exempt securities?

NO

is an individual whose sole income consists of dividends and capital gains permitted to contribute to an IRA?

NO

is clients must receive the adviser's brochure at least 48 hours before entering into an advisory contract a USA req?

NO

An agent sells U.S. treasury bonds to an individual client, exempt or not exempt?

NOT EXEMPT

is the sale of U.S. government securities to an individual with a net worth in excess of $2 million by a registered government securities dealer exempt or not exempt?

NOT EXEMPT

characteristics of commercial paper?

Negotiated maturities and yields/Not registered with the SEC

annuity purchase options include?

Periodic payment deferred annuity/ Single premium immediate annuity /Single premium deferred annuity

An investor buys 5 put contracts with a strike price of $55 per share. The current price of the underlying stock is $60 and the option premium is $7. what is the total commission cost based for this trade?

The cost per contract is $7 x 100 shares, or $700. That makes the total trade amount $700 x 5 contracts, or $3,500, which qualifies for the commission rate of $35 + 7% of the trade amount. $35 + 0.7% of $3,500 = $35 + $24.50 = $59.50 total charge.

participant loans in a 401(k) plan characteristics?

The maximum allowable loan amount is the lesser of $50,000 or 50% of the participant's vested account balance/ Unless the loan is taken out for the purpose of a mortgage on the participant's principal residence, repayment must be completed within 60 months of obtaining the loan/ Payback of the loan will be through payroll deduction/ Default on the loan will result in the IRS treating the loan as a distribution.

characteristics of ADRs?

The securities are vehicles used to facilitate U.S. trading of foreign securities/ Holders have foreign currency risk.

debit to our foreign account balance?

U.S. residents taking vacations abroad

when would a premature distribution from a traditional IRA be exempt from the premature distribution penalty?

When the distribution is paid in equal annual amounts over the owner's life

If a customer owns 7% of a publicly-traded company's stock and his spouse owns 6% and wants to sell her shares, is the spouse an affiliate and does Rule 144 apply?

YES they both have over 10% ownership

An investment adviser representative of a federal covered investment adviser registers with?

admin

a transaction where a person acts as both an investment adviser and broker-dealer in the same transaction

agency cross transaction

To determine the amount of change in the GDP from 1 year to another, both years' GDP should be converted into?

constant dollars

a pension plan is a?

defined contribution plan

to recommend shares of an affiliated company to clients?

disclose the potential conflict of interest

Non-exchange-traded structured securities products (SSPs) typically have?

embedded derivatives

A corp offers their employees an opportunity to participate in the future growth, what is this?

employee stock options

if a client goes long call on a long position it is to?

fix the cost of acquiring additional stock to the portfolio

Using the net present value method, a potential investment should be undertaken if the present value of all cash inflows minus the present value of all cash outflows is?

greater than zero

lowest correlation coefficient (largest negative #) between two funds means?

greatest diversification

no investment experience/major consideration is saving for retirement/limited risk tolerance

growth and income funds

A foreign private adviser is defined in the Dodd-Frank Act as any investment adviser that?

has no place of business in the United States/ has, in total, fewer than 15 clients and investors in the United States in private funds advised by the adviser/ has aggregate AUM attributable to clients in the United States and investors in the United States in private funds advised by the adviser of less than $25 million.

IAR can do what in a trust?

have a check drawn on the account payable to the trustee for expenses

A retired woman whose sole income comes from a portfolio of investments with a fixed rate of return is most affected by?

high inflation

A private equity fund would most likely be structured as a

limited partnership

used to provide end-of-life instructions once a person becomes incapacitated?

living will

manufacture soybean oil, price of soybeans will increase over the next 6 months, best strategy to employ would probably be?

long hedge

if an agent recommends a proprietary mutual fund to a client, it is considered?

potential conflict of interest

KAPCO Advisers, a registered investment adviser, recommends the purchase of 100 shares of GEMCO common stock to one of its advisory clients. The client accepts the recommendation and the sale is made from KAPCO's inventory. This transaction req?

written disclosure to and the consent of the client prior to the completion of the transaction