SIE PRACTICE
holding customer mail is consistent with your broker dealers in House rules considering this if requested to do so the broker dealer must
Verify at reasonable intervals that the customers instructions still apply
I Customer enters the following order cell 1000 shares of XYZ at 23 which of the following executions would the customer accept
23.50
A bond has a 7% coupon and is currently offered at a price of 102 which of the following yields could be the yield to maturity for this bond
6.55%
An investor is short 1 December 15 put at 6. The investors maximum loss on this position is
900
The violation of selling mutual fund shares just below the point where the customer would qualify for lower sales charges and not informing the customer that they may qualify for lower sales charges is called
A break point sale
If a registered representative allows a customer to unknowingly by investment company shares in an amount just under a dollar bracket that would qualify for a reduced sales charge or encourages such a purchase this is known as
A breakpoint sale violation
How many partnership soldier private placement involve
A small group of investors each contributing a large sum
To meet the requirements of the Know your Customer rule, a registered representative would be required to gather information on all the following except
A. The customers financial and non-financial investment considerations B. If the customer graduated from college C. What the customers objectives are D. All the essential facts about the customer related to the investment correct B
The market price of a companies common stock could be affected by
All of them I. The companies earnings II. Changes in the business cycle III. Federal reserve board policies IV. International conflicts
Often refers must have business continuity plans those plans must include all of the following except
Alternate physical locations at least 100 miles apart in case of a disaster
Which of the following would require the filing of a suspicious activity report
Any transaction alone or an aggregate involving at least $5000 in appears to serve no business or legal purpose
T Bonds and T notes
Are both priced as a percentage of par
The options disclosure Document must be provided
At or before the time of account approval
If your investor purchases a mutual fund based solely on seeing the summary prospectus the investor must
Be able to access a full prospectus no later than confirmation of sale
The corporation wanting to raise cash to finance accounts receivable in seasonal inventory needs is likely do issue any of the following except
Bonds
Individual has been a registered representative with a national firm for the past three years another member for makes an attractive offer in an attempt to learn this individual to join them in order to do so the paperwork necessary would be
Both the form U5 from the previous employer in a form U4 from the new one
All the following are non-systematic risk except
Business risk call risk capital risk CORRECT D. Purchasing power risk
If a customer sold calls to open which of the following transactions would be allowed if the options agreement was not returned it signed within 15 days
Buy calls to close
Recommendations regarding investment strategies under the no your customer rule would not apply to recommendations to
Buy or sell commodities
Regarding registered representatives working from the residence commonly known as their home office all of the following would be true except
CORRECT: A. prospects would not be allowed to visit and be on the premises at this location B Home office address and telephone numbers may be used for normal advertising purposes C The office would be subject to a premise visit and review by a principal of the firm D The office is subject to a premise visit by financial industry regulatory authority examiners as often as they see fit
Deflationary periods are characterized by all of the following except
CORRECT: Increased consumer demand a decline in prices coinciding with recessions rising unemployment
What are the two basic types of return on an investmentWhat are the two basic types of return on an investment
Capital gains and income
Your broker dealer execute trades for other broker dealers and after execution settles those transactions for them your firm would be classified as which of the following
Carrying firm
Preferred shares have
Characteristics of both equity nor debt securities
All of the following statements are true except
Closed and company may issue preferred stock A bond mutual fund may not issue bonds CORRECT: A bond mutual fund may issue bonds a closed end company may issue bonds
Which of the following would be most susceptible to currency risk
Common stock of a large well-established company in England
And investor purchases a bond in the secondary market at $950 assuming $1000 par value responders trading at
Discount
A bank trusty holds the titles to assets a corporation has purchased in utilizes in its day today business corporation issues debt securities back by these assets the securities are
Equipment trust certificates
Which of the following oil and gas direct participation programs might be considered the riskiest
Exploratory
As interest rates rise prices of preferred stock will
Fall
A company that is extensively overleveraged using debt financing whenever available would be exposing its investors to
Financial risk
The MSCI-EAFE Index Tracks which of the following
Foreign equities
Which of the following is true of clothes and funds but not open and fundsWhich of the following is true of clothes and funds but not open and funds
Have a fixed number of shares
A common stockholders voting rights apply to which of the following
I Election of the board of directors II Declaration of dividends III Authorization or issue of more common shares IV Changing suppliers for raw materials or parts used in production CORRECT I, III
Which of the following are characteristics of a revocable living trust
I It is established before the grantor dies II The grantor can change beneficiaries III The grantor can add or remove items from the trust IV The grantor is subject to tax on income that remains in the trust CORRECT: I II III IV
Which of the following choices would a registered representative be able to make for a customer in a non-discretion area account
I. The time of execution of the trade IV. At what price to execute the trade
Which of the following is not a type of real estate direct participation program
Income
For the primary market which of the following is true
Issuer transactions occurred in the primary market insecurities are offered at a public offering price
Someone who purchases shares of a corporations common stock has
Limited liability in voting rights
At the time of the solution which of the following regarding a limited partnership is true
Limited partners are paid before general partners
Rules to protect the investing public during the public offering process include all the following except
Limiting the number of shares of an initial public offering that may be purchased by the issuing companies employees
By virtue of a socks listing for trading on a US stock exchange which of the following risks is reduced or even recognized as eliminated
Liquidity risk
Which of the following option positions would offer a full hedge to a long stock position
Long put
Your customer is aware that a corporate action has taken place worth the adjustment to the number of shares owned in the stock price will not be standardized but instead is unique to fit the circumstances in terms of the corporate action of those listed which is most likely to be such an action
Merger or acquisition
Which of the following can encourage economic growth because gradually increasing prices tend to stimulate business investment
Mild inflation
The process of making money that appears to have come from legal activities when it in fact team from illegal activities is called
Money laundering
Which of the following regulatory bodies regulates but has no enforcement powers
Municipal securities rule board
Which type of shares allow the investor to buy and sell the shares at NAV and have a 12b-1 fee of 0.25% or less
No load
The seller of a put has
Obligation to buy stock
A member firm receives an order to purchase shares in a common stock initial public offering from another broker dealer for a customer regarding restricted persons the member must
Obtain a written representation that the buyer is not a restricted person
State registration is not required if the transaction is exempt an example of an exempt transaction would be
One that is unsolicited
Which of the following documents must be provided to the customer prior to approval of an option's account
Options disclosure document
Companies in defensive industries would be the manufactures ofCompanies in defensive industries would be the manufactures of
Pharmaceuticals
Mutual fund can offer all the following to investors except
Physical custody of the funds portfolio cash insecurities
Registered representative wants to place advertisements in his daughter's eutathleticly quarterly sponsorship booklet he wants to convey in the weekly bulletin at his church that he specializes in retirement planning and 529 plans which of the following statements regarding these advertisements is true
Preapproval buy a principle of the broker dealer is required
Financial industry regulatory authority rules regarding outside business activities require that
Prior written notice to the employing firm be provided
An investor has a bond maturing during a time when interest rates are falling it is likely the the investor wanting to keep the funds invested would be most concerned with
Reinvestment risk
Opening a margin account for a client requires the client to do all of the following except
Signing the credit agreement signing the hypothecation agreement receive a risk disclosure document CORRECT: signing the loan consent
Stock market value is directly determined by which of the following
Supply and demand
which of the following is true regarding money market securities
T notes and T-bonds can be considered money market instruments when they have only a year left to maturity
A company offers to re-purchase outstanding debt securities it has issued directly from his bond holders for cash and what would commonly known as
Tender offer
The measure of the inflation rate is
The consumer price index
What is the spread on a stock quote
The difference between the bid price and the ask price or offer
Which of the following Has the greatest influence on the money supply within the United States
The federal open market committee
The coupon rate on a debt security represents
The interest rate the issue were has agreed to pay the investor
Variable annuities investment return each month is based on
The performance of the separate account
A breakpoint sale is
The sale of investment company shares in dollar amounts just below the point at which the sales charge is reduced on quantity transactions to encourage the higher sales charge
A corporation has a shareholders meeting coming up where in several controversial Proposals will be made a number of persons will be actively soliciting proxies in the corporation plans to send out up-to-date material on the proposals to shareholders to permit them to make informed decisions which of the following must review this material before it is sent out
The securities and exchange commission
Your customers purchased an MJS October 35 called at 4. their proof of ownership will be
Trade confirmation
List adoption transactions settle
Trade day + one business day
The Securities act of 1933 exempt all the following securities from registration except
US gov bond issues savings and loan issues CORRECT: public real estate investment trusts municipal issues
An investor interested in quarterly income should invest in
Utility company stock
Which of the following investments will be most acceptable to inflation risk
Value stock 10 yr corp bond rates BBB growth stock CORRECT D. 30 year treasury bond
Which of the following is a true statement with regard to either US security laws or the description of international economic factors
When the US dollar is strong foreign currency buys fewer US goods
All the following would be acceptable methods for the customer opting out of allowing the broker dealer to share their nonpublic personal information except
Writing a letter
If a bonus treating at a discount which of the following rates is correctly ranked from high to low
Yield to call yield to maturity current yield nominal yield
A toy company is experiencing sudden strong demand for a game. Purchasing this company's stock may prove profitable in the short run. This company's stock might best be termed as
a special situation
Margin calls can be met with deposits of
cash or fully paid for marginable securities
All of the following are types of direct participation programs except
leasing CORRECT: retail distribution oil and gas real estate
Borrowing money to buy securities is prohibit in all of the following accounts except
margin
Mutual funds that market directly to the public using no underwriter and charging no sales charge are called
no load funds
Inflation risk is most closely associated with
purchasing power riskPurchasing power risk
The ratings on the debt instrument of a foreign country with outstanding loans from a number of other countries worldwide have been downgraded the impact felt due to the risk of possible default is known as
sovereign risk
Listed options can be exercised by
the holder from the time of purchase until they expire
Interest on a 7% corporate bond would be paid to the investor as
two semi annual checks for $35 each