practice exam 1
Due to a distribution of stock, the contract size in the JGH Oct 50 call options is 108. A customer purchasing one of these contracts for a premium of 2½ would expect to pay
108 * 2.5 = $270
In a new margin account, a customer sells short 1,000 shares of XYZ at $30 per share and deposits the required margin. If the stock subsequently falls to $25 per share, the equity in the account is
20,000
At the birth of a grandchild, your customers, the child's grandparents, purchased 1,000 shares of XYZ stock at $10 per share in their JTWROS account. The child is now an adult and the grandparents gift all the shares to their grandchild when the stock price is $50 per share. If the donee sold all the shares at $55 per share, the tax consequences would be a capital gain of
45,000
The Class B shares of the KAPCO Fund carry a conditional deferred sales charge beginning at 5% and reducing each year after the second by 1% per year until eliminated. An investor making an initial purchase of $10,000 of these shares will pay a sales charge of A) $500.00 B) $0.00 C) $100.00 D) $50.00
500 ?
The term trading flat means A) there is no accrued interest. B) the price of the bond has remained level. C) the bond is in default. D) the bond is sold without markup or commission.
A. there is no accrued interest
A customer buys a 5% bond at par. The bond is callable in five years at par and matures in 10 years. Which of the following statements is true? A) YTC is higher than YTM. B) YTC is the same as YTM. C) Nominal yield is higher than either YTM or YTC. D) YTC is lower than YTM.
B. Since it is AT PAR, YTM = YTC.
Which of the following mutual funds should an investment adviser representative recommend to a corporate client whose objective is current income with moderate risk? A) Aggressive growth fund B) High-yield bond fund C) Money market fund D) Preferred stock fund
D. Preferred stock fund
A tool used by investment banking firms to combine several unsuccessful limited partnership programs into one new entity is A) a multiprogram partnership. B) a DPP rescue. C) a DPP rollup. D) a merger.
DPP Rollup
Which of the following investments is most suitable for an investor seeking MONTHLY income? A) Growth stock B) Zero-coupon bond C) Mutual fund investing in small-cap issues D) Money market mutual fund
Investor is seeking MONTHLY income...
If two customers wish to combine their purchases of a mutual fund to take advantage of the fund's breakpoints, you should advise them that they may A) do so, provided they indicate the proportion that goes into each separate account. B) not do so because they both have accounts with the same broker-dealer. C) not do so because two unrelated buyers may not receive a breakpoint. D) do so, provided they have no business connection with the fund sponsor.
c?
The date on which the interest on a new municipal issue begins accruing is A) the dated date. B) the settlement date. C) the closing date. D) the delivery date.
dated date ?
A registered representative reproduced a research report prepared by an independent research analyst on his broker-dealer's letterhead, with no mention of the party who prepared the report. If this literature is forwarded to a select group of clients only, the registered representative's action is A) allowed only if the research report has been filed with FINRA. B) not allowed. C) allowed with the written approval of a principal of the broker-dealer. D) allowed.
not allowed
All of the following would flow through as a loss to limited partners except A) principal repayment on recourse debt. B) depletion. C) accelerated depreciation. D) interest payments on recourse debt.
principal repayment on recourse debt
If earnings decline significantly, which of the following employer-sponsored qualified retirement plans can reduce or even eliminate its contribution for the year?
profit sharing plan ?
Information found in The Bond Buyer would include all of the following except A) secondary market volume. B) Revdex. C) the 30-day visible supply. D) the placement ratio
secondary mkt volume
