wassup
One of your customers had a rich uncle who died and left him $20,000 worth of mutual fund shares. The customer, who is in the 20% tax bracket, notices after a few months that the shares have gone down in value to $18,000. He would like to liquidate them before they depreciate further. What tax consequences can he expect?
He can declare a $2,000 loss.
According to the Conduct Rules, a FINRA member firm may give certain selling concessions to which of the following?
Other member firms.
At what age is an individual required to begin taking distributions from a Roth IRA?
There is no age at which distributions are required.
A customer who has just started an IRA will be vested:
immediately.
Under SEC Rule 498, a summary prospectus may be used in a mutual fund sales presentation resulting in a sale
only when the investor is able to access a statutory prospectus online
Dividend distributions from a bond fund would be taxable:
whether the dividends are received in cash or reinvested.
An agent may deliver a preliminary prospectus for an IPO:
while the issue is in registration.
All of the following statements concerning IRA contributions are true EXCEPT:
you may make contributions for the past year after April 15, provided you have filed an extension on a timely basis.
A teacher has a 403(b) plan and the school system he works for has deposited $10,000 into his plan over a 12-year period. At retirement, if the teacher withdraws the total value of $16,000, on what amount does he pay tax?
$16,000.00
Under FINRA rules, the carrying member, after receiving account transfer instructions from the receiving member must validate the positions in the account within how many business days of receipt?
1 day
The phrase employer matching is commonly used when referring to which type of retirement plan?
401(k) plans.
A distribution from a corporate pension plan to be rolled over into an IRA must be completed within how many days to maintain its tax-deferred status?
60 days.
Which of the following permits the highest annual contributions?
A SEP IRA.
Which of the following must be reviewed and approved by a principal before it may be sent out?
A communication sent to 36 prospective customers this week, recommending a new mutual fund A communication sent to 36 of the firm's existing customers this week, introducing a new service offered by the firm
Which of the following may a registered representative use to solicit an order for open-end investment company shares?
A prospectus A summary prospectus
Mr. and Mrs. Smith, both nearing retirement, want to maximize their income. They want to reallocate $100,000 of their $400,000 portfolio of securities for this purpose. Of the possible investment choices below, which would be the LEAST suitable recommendation given their investment objective?
AAA convertible corporate bonds
All of the following securities would be suitable investments for a traditional IRA EXCEPT:
AAA municipal bonds.
If your customer invests in a tax-sheltered variable annuity, what is the tax treatment of the distributions he receives?
All ordinary income.
When a customer opens an account with a financial institution, the institution is required to give a clear and conspicuous disclosure to the new customer regarding its policies and procedures for customer privacy. How often must the customer receive an updated notice containing the same information?
At least on an annual basis.
Your customer has heard about precious metals funds. He asks about the types and amounts of various precious metals these funds might own. You tell him he has mistaken the focus of these funds. A gold fund, for example, might own:
Barrack Gold Corporation common stock.
The managing underwriter has indicated it is unlikely the issuer can sell $100 million of common stock to the public. In which of the following types of offerings does a syndicate have no financial obligation for unsold securities
Best Efforts
Which of the following statements is NOT true of Regulation S-P?
Customers must be given annual privacy disclosures on a separate piece of paper.
Which of the following types of retirement plans would be most beneficial to a young employee of a corporation?
Defined contribution pension plan.
Which of the following statements regarding taxable investment company distributions to investors is TRUE?
Dividend distributions are reported on IRS Form 1099-DIV.
If a corporation begins a nonqualified retirement plan, which of the following statements is TRUE?
Employee contributions grow tax deferred if they are invested in an annuity.
ALFA Securities is the managing underwriter for an initial public offering of one million shares of ABC common. It has agreed to sell all of the stock being offered and to buy, as principal, any stock it cannot sell to the public. ABC will receive the proceeds from the sale of one million shares. This arrangement is known as what type of underwriting?
Firm commitment.
Which of the following, though issued by a municipality, is NOT backed by its taxing authority?
Industrial development bond.
A 45 year-old investor is in the highest tax-bracket and wants to save over the next 20 years for a retirement income. Which of the following recommendations is least appropriate?
Open an IRA and fund it with municipal bonds.
Under the Investment Company Act of 1940, which of the following are considered management companies?
Open-end companies. Closed-end companies
Which of the following are NOT considered public communications of a broker-dealer and therefore not filed by the broker-dealer with FINRA?
Prospectuses
A customer would like to know which of the following mutual funds has the highest potential for capital growth. Which would you choose?
Small-cap technology stock fund.
One of your clients wants to set aside some money for her ne'er-do-well nephew, who just turned 30. She does not wish his numerous creditors to have access to the money until after she dies, but she wants him to have easy access to the money at that time. You recommend that she open a:
TOD registration on an account in her name.
Which of the following regarding a Roth IRA are TRUE?
The contributions are nondeductible. Withdrawals after age 59½ can be tax free.
Ginnie Mae issues pass-through certificates. What does this mean?
The investor receives principal and interest after the homeowner has made his monthly mortgage payment.
If the SEC has cleared an issue, which of the following statements is TRUE?
The issuer has filed a standard registration statement.
If a registered representative of a FINRA member firm wants to open an account with another member firm, which of the following statements are TRUE?
The member firm opening the account must send duplicate confirmations to the employing member firm if requested to do so. The member firm opening the account must give notice to the employing member firm.
Which of the following transactions may be made on margin?
The purchase of NYSE-listed closed-end fund shares.
The rules concerning a person from a FINRA member firm opening an account with another member are applicable to which of the following?
The rules concerning a person from a FINRA member firm opening an account with another member are applicable to which of the following? Employee of a member selling only government securities.
If a registered representative wishes to distribute a copy of a national magazine article about the GAON Mutual Fund, which of the following statements is CORRECT?
This material meets the definition of an independently prepared reprint. The article may not be sent without prior or concurrent delivery of the GAON Fund prospectus.
The Securities Act of 1933 requires that all of the following be offered by a prospectus EXCEPT:
Treasury bonds.
You have supplied a summary prospectus for a mutual fund to a customer rather than the full prospectus. The customer would like to purchase the fund immediately. Under what circumstances could you enter the order?
You may enter the order only if he is able to access a statutory prospectus online.
Your customer, age 32, makes $48,000 annually and has $15,000 to invest. Although he has never invested before, he wants to invest in something exciting, with investment returns in the 20%+ range. Which of the following should you suggest?
Your customer should provide more information before you can make a suitable recommendation.
According to investment company rules, open-end investment companies may not distribute long-term capital gains to their shareholders more frequently than:
annually.
All of the following statements about joint tenants with rights of survivorship are true EXCEPT:
checks can be made out to either party.
All of the following statements about SEP IRAs are true EXCEPT:
contributions to SEPs are made with after-tax dollars.
A meeting between the issuer and underwriter to ensure that the prospectus is true and accurate is called:
due diligence meeting.
A deferred compensation plan needs the prior approval of the:
employer only.
A customer requests not to receive confirmations of the trades he makes. The registered representative should
explain that FINRA rules don't allow for that
Institutional communications include all of the following EXCEPT
informational material on a new mutual fund offered by a registered investment company intended for use by registered sales personnel only television appearances by an officer of a member firm
A 54-year-old client is in the highest tax bracket and seeks a conservative investment for retirement. If his investment adviser representative recommends a general obligation municipal bond for the client's IRA, the IAR has:
made an unsuitable recommendation based on the client's needs and objectives.
If a company starts a pension plan for an employee who already has an IRA, this employee:
may continue to contribute to his IRA, but the contributions may not be 100% deductible, depending on his level of compensation.
A FINRA member firm is found guilty of some but not all of the charges brought against it by the Department of Enforcement. An appeal:
must be made within 25 days of the decision. stays the effective date of any sanction other than a bar or expulsion.
Under ERISA, all of the following retirement plans must set standards for vesting, eligibility, and funding EXCEPT:
profit-sharing plans.
The primary purpose for creating ERISA was to:
protect employees from the mishandling of retirement funds by corporations and unions.
Your customer has invested in a mutual fund with a 12b-1 fee. You explain to him that a charge will be deducted from his account:
quarterly.
Under the Conduct Rules, all of the following actions violate fair and ethical treatment of customers EXCEPT:
recommending that a customer set up a scheduled investment program, depositing the same amount each period regardless of market value.
If interest rates increase, the interest payable on outstanding corporate bonds will:
remain unchanged.
Regarding communications, filing with FINRA is required for
retail communication that includes a ranking by an independent entity
All of the following must 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
Cash settlement for a trade in a customer's account must settle:
the day of the trade
The investment policy of a mutual fund can be changed by a majority vote of:
the outstanding shares.
In general, the Conduct Rules permit selling concessions and discounts:
to FINRA member firms engaged in the investment banking or securities business.
In the sale of open-end investment company shares, the prospectus must be delivered:
to the client either before or during the sales solicitation.
