Progress Exam - 1A

A convertible bond has a conversion price of $40 and is currently selling in the market at $950. The conversion ratio is: a. 25 b. 23.75 c. 40 d. 38

25

A U.S. government bond is selling in the market at 95.28. The dollar value of this bond is: a. 950.87 b. 952.80 c. 958.75 d. 9,587.50

958.75

Banks savings account are guaranteed and insured by the: a. SIPC b. FDIC c. Federal Reserve Board d. Department of the Treasury

FDIC

Which of the following organizations enforces municipal securities regulations for broker-dealers? a. The FRB b. The FDIC c. FINRA d. The MSRB

FINRA

A bond is selling at a premium. This indicates that: a. the yield to maturity is greater than the nominal yield b. the market price is less than the par value c. interest rates have decreased since the bond was issued d. the nominal yield is less than the current yield

Interest rates have decreased since the bond was issued

Which of the following regulates the resale of restricted securities? a. Rule 147 b. Regulation D c. Rule 144 d. Rule 145

Rule 144

If a municipal bond is backed by the revenues of a facility and the income is insufficient to make the debt service payment, which of the following statements is TRUE? a. The bond's indenture will need to be amended. b. The bond's interest rate will increase. c. The issuer is required to close the facility. d. The issuer will default on its next payment.

The issuer will default on its next payment

Which of the following statements is TRUE concerning electronic communication networks (ECNs)? a. They can be used only by retail investors. b. They can be used by investors who want to trade anonymously. c. They can be used only by institutional investors. d. They can be used by clients who don't want to use a broker-dealer

They can be used by investors who want to trade anonymously

A common shareholder is not entitled to: a. vote for the board of directors b. Receive dividends if voted for by the board of directors c. Give or sell shares to anyone she wishes d. Appoint officers of the corporation

appoint officers of the corporation

When a bond is called, the bondholder receives the: a. call price b. call price plus accrued interest c. market price d. market price plus accrued interest

call price plus accrued interest

The FDIC provides coverage for: a. Certificates of deposit (CDs) b. Fixed annuities c. Life insurance d. Variable annuities

certificates of deposit (CDs)

Which of the following investments is the MOST suitable for a person who is interested in aggressive growth? a. common stock b. high-yield bond fund c. high-rated bond d. preferred stock

common stock

A brokerage firm purchases 600 shares of stock from a customer and places the securities into its inventory. In this case, the firm likely acted as a(n): a. dealer b. designated market maker c. agent d. underwriter

dealer

The purpose of a depository facility is to: a. Clear transactions in equity securities b. Clear transactions in fixed-income securities c. Hold securities in book-entry form d. Ensure that dividend payments are sent to investors by the issuers of the securities

hold securities in book-entry form

When purchasing Treasury notes, an investor should understand: a. Delivery is in either book entry or physical form b. Interest is paid at maturity c. Interest is paid semi-annually d. Principal is adjusted for inflation

interest is paid semi-annually

A corporation wants to offer its shareholders the ability to obtain shares at a fixed price. Which security should the corporation issue? a. puts b. preferred stocks c. futures d. rights

rights

How often do Treasury notes pay interest to investors? a. quarterly b. annually c. semiannually d. at maturity

semiannually

Which bonds are considered the most liquid? a. corporate bonds b. municipal bonds c. treasury bonds d. mortgage bonds

treasury bonds

Which of the following securities trades in fractional units of 1/32 of a point? a. convertible bonds b. municipal bonds c. treasury bonds d. corporate bonds

treasury bonds

Which of the following securities has the longest period until expiration? a. rights b. options c. warrants d. repurchase agreements

warrants