SIE unit 6

A retirement plan that requires a formula-based payment for the retiree's life is A. a pension plan B. a defined contribution plan C. a money purchase plan D. a 401(k) plan

A. a pension plan

If three individuals have a tenants in common (TIC) account with your firm and one individual dies, then A. the two survivors continue as cotenants, along with the decedent's estate B. the account must be liquidated and the proceeds split evenly between the two survivors and the decedent's estate C. trading is discontinued until the executor names a replacement for the deceased D. the account is converted to joint tenants with right of survivorship

A. the two survivors continue as cotenants, along with the decedent's estate

As the first purchase in a new margin ‼️ account, your customer purchases 200 shares of ABC stock at $9 a share. The customer is expected to deposit how much to pay for the trade? A. $900 B. $1,800 C. $2,000 D. $450

B. $1,800

Your customer purchases 200 shares of ABC stock at $9 a share in a cash ‼️ account. The customer is expected to deposit how much to pay for the trade? A. $900 B. $1,800 С. $2,000 D. $450

B. $1,800

A trust formed during the grantor's lifetime that may be modified only by the original grantor is normally called A. an irrevocable living trust B. a revocable living trust C. an A-B trust D. a life insurance trust

B. a revocable living trust

A corporation opening a brokerage account must present all of the following documents except A. a new account form B. an authorization from the state department of corporations C. a copy of the corporate charter D. a resolution of the board of directors

B. an authorization from the state department of corporations

Your customer calls and requests that you purchase 300 shares of Seabird Coffee Company. He recently read an article online about the company's new collaboration with Sorag coffee makers and likes the prospects of Seabird. This is an example of A. a solicited trade B. an unsolicited trade C. a discretionary trade D. a suggested trade

B. an unsolicited trade

Chris Perez began contributing $3,000 a year to a Roth IRA account 10 years ago when he was 50 years old. The account value today has grown to $60,000. He withdraws $5,000 from the account. Perez will owe taxes on A. the entire amount of the withdrawal B. none of the withdrawal C. the principal portion of the withdrawal D. the gains plus a 10% penalty for premature distribution

B. none of the withdrawal

The customer must agree to three specific elements of a trade before the trade's execution for the trade to be nondiscretionary. Which of the following is not required? A. Action B. Asset C. Allowance D. Amount

C. Allowance

An individual opens an account with your firm. She tells you that upon her death, she wants any assets in the account to be divided equally among her three children. She also wants the ability to change the allocation in the event that conditions change and one of the children is in greater need than the others, but she does not want to incur any significant legal expense. You would suggest that the account be opened A. as a joint account with right of survivorship В. as a joint account with tenants in common C. as an individual transfer on death (TOD) account D. under a discretionary power

C. as an individual transfer on death (TOD) account

When opening a new brokerage account that will allow for margin trading, all of the following forms are required except A. account application B. credit agreement C. consent to loan agreement D. hypothecation agreement

C. consent to loan agreement

In order to contribute to both a traditional IRA and a Roth IRA in the same year, a customer must have sufficient A. ordinary income B. passive income C. earned income D. portfolio income

C. earned income

Your customer, Cleveland Brown, would like you to be able to place trades in his account as and when you think best. In order to trade on a discretionary basis in Brown's account, you will need authorization from which of these? I. FINRA II. A principal III. The customer IV. The state administrator A. I and II B. I and I|I C. I and IV D. Il and I|I

D. Il and I|I

Which of the following investments would not be allowed in a custodial account? A. Covered call options B. Small-company stocks from an emerging market C. Blue-chip stocks D. Uncovered call options

D. Uncovered call options