Series 65 Exam (1)
A nonqualified, single premium variable annuity differs from a Keogh plan in that A) all payouts are fully taxable in a Keogh plan B) both are subject to early withdrawal penalties C) earnings are tax deferred D) it is open to self-employed persons
A) all payouts are fully taxable in a Keogh plan
All of the following statements regarding a client's attitudes, beliefs, and values are correct except A) the IAR should pay little attention to a client's attitudes, beliefs, and values during the information gathering process. B) the client's attitudes reflect the client's opinions, values, and wants. C) values are attitudes and beliefs for which the client feels strongly. D) beliefs are a type of attitude because they reveal the client's understanding of some aspect of his life.
A) the IAR should pay little attention to a client's attitudes, beliefs, and values during the information gathering process.
Which 2 are most associated with a U. S. Treasury bond? I. Credit risk II. Liquidity risk III. Reinvestment risk IV. Interest rate risk A) I and II B) III and IV C) I and IV D) II and III
B) III and IV
Under which of the following asset allocation programs is it most likely that commission expense will have a significant impact on portfolio performance? A) Strategic B) Tactical C) Buy and hold D) Rebalancing
B) Tactical
Which efficient market hypothesis suggests that an investor can achieve above-market returns only by utilizing insider information? A) Super-strong B) Strong C) Semi-strong D) Weak
C) Semi-strong
Barzell Manufacturing Works (BMW) produces structural steel. To raise additional capital to modernize its plant, BMW decides to go public by issuing shares. Doing so would make BMW A) a broker-dealer. B) a commodities dealer. C) an issuer. D) a manufacturer.
C) an issuer.
A bond of standard size has a nominal yield of 6%, paid in the customary fashion. The bond matures in 10 years, is callable at $105 in 5 years, and is currently priced at $110. An investor calculating the bond's yield to call would include A) 20 payment periods. B) the gain of $50 when called. C) the semiannual interest payments of $30. D) the loss of $100 at maturity.
C) the semiannual interest payments of $30.
The long party is a futures contract that has entered the contract as A) a market maker. B) a seller. C) a liquidity provider. D) a buyer.
D) a buyer.
As defined in the Uniform Securities Act, in which of the following cases would an investment adviser (IA) not be considered to be maintaining custody? (A) The IA receives a check made payable to the IA and returns it within three business days. (B) The IA keeps client securities in street name. (C) The IA has indirect control over the client's securities. (D) The IA has direct control over the client's securities.
(A) The IA receives a check made payable to the IA and returns it within three business days.
Which of the following statements best represents modern portfolio theory (MPT)? A) It differs from a traditional securities analysis in that it emphasizes determining the relationship between risk and reward in the total portfolio rather than analyzing specific securities. B) It differs from a traditional securities analysis in that it emphasizes determining the relationship between risk and reward in specific securities rather than analyzing the total portfolio. C) Because investors tend to act irrationally, the optimum portfolio is one consisting of a limited number of high-performing securities. D) Given a choice between a higher return with a higher risk and a lower return with a lower risk, most investors will choose the latter path.
A) It differs from a traditional securities analysis in that it emphasizes determining the relationship between risk and reward in the total portfolio rather than analyzing specific securities.
Which of these statements regarding nonqualified deferred compensation (NQDC) plans is correct? A) NQDC plans can discriminate in favor of key executives. B) NQDC plans are not flexible. C) Although not covered by most ERISA rules, nonqualified deferred compensation plans must meet the vesting rules. D) NQDC plans generally provide coverage for rank-and-file employees.
A) NQDC plans can discriminate in favor of key executives.
Section 404(c) of ERISA deals with A) fiduciary responsibilities B) eligibility requirements C) distribution options D) tax qualification of the plan
A) fiduciary responsibilities
Federal covered investment advisers must comply with the SEC's Model Marketing Rule for Investment Advisers. That rule includes A) requiring a written agreement between an investment adviser and a promoter who receives more than $1,000 over a 12-month period for endorsing the services of the adviser. B) a prohibition against reduced-fee introductory offers. C) a requirement that a copy of all advertisements be sent to the SEC at the time they are disseminated to the public. D) a prohibition against showing the adviser's past performance.
A) requiring a written agreement between an investment adviser and a promoter who receives more than $1,000 over a 12-month period for endorsing the services of the adviser.
One of your clients is viewing a stock held in her portfolio and wishes to know how to calculate the holding period return for that security. In order to do that, she must know all of the following except A) the date the stock was purchased and the date it was sold. B) the current market price C) the dividends received during the holding period D) the purchase price
A) the date the stock was purchased and the date it was sold.
What is true of federal covered securities? I. They are exempt from registration under the Uniform Securities Act as amended. II. They are nonexempt from registration under the Uniform Securities Act as amended. III. They can be required to pay state filing fees. IV. They cannot be required to pay state filing fees. A) I and IV B) I and III C) II and III D) II and IV
B) I and III
An Administrator has specific authority under the USA to do which of these? I. Suspend the registration of a security if the suspension is in the public interest and the offering has excessive underwriting fees. II. Issue emergency injunctions to prevent a violation of the act. III. Enforce subpoenas in the state at the request of an Administrator of another state for alleged violations that occurred in another state. IV. Require that the proceeds from an offering be held in escrow until the issuer receives a certain percentage of the sale of the securities offered. A) I, II, and IV B) I, III, and IV C) I only D) II and III
B) I, III, and IV
An investment adviser plans to sell securities out of its own investment account to an advisory client. In order to do so, which of the following is required? I. A reduction in the fee equivalent to the profit made on the trade II. Consent of the client before completion of the trade III. Written disclosure of the adviser's capacity before completion of the trade IV. Notification to the Administrator of the adviser's plan to act as a principal A) II and IV B) II and III C) I and III D) I and IV
B) II and III
If a portfolio manager wished to reduce inflation risk, which of the following would be most appropriate to add to the portfolio? A) Fixed annuities issued by an insurance company with Best's highest rating B) Tangible assets C) Preferred stock D) AAA bonds
B) Tangible assets
Which of the following best describes a Yankee bond? A) U.S. dollar-denominated bond issued by a U.S. entity outside the United States B) U.S. dollar-denominated bond issued by a non-U.S. entity inside the United States C) U.S. dollar-denominated bond issued by a U.S. entity inside the United States D) U.S. dollar-denominated bond issued by a non-U.S. entity outside the United States
B) U.S. dollar-denominated bond issued by a non-U.S. entity inside the United States
Financial planners frequently assist their clients with budgeting. One can't really prepare a budget without knowing the family's cash flow. In preparing a family cash flow statement, all of the following items would appear except A) salary B) assets C) interest on saving accounts D) taxes
B) assets
All of the following actions will increase the deficit in the U.S. balance of payments except A) U.S. foreign aid. B) the purchase by foreigners of U.S. securities. C) Americans buying Japanese cars. D) investments by U.S. firms abroad.
B) the purchase by foreigners of U.S. securities.
The final step in the approval process of the annual operating budget for the United States is A) the signature of the Speaker of the House. B) the signature of the president. C) the signature of the secretary of the Treasury. D) a majority vote of the cabinet.
B) the signature of the president.
One of your advisory clients indicates that he would like to sell forward contracts in soybeans. It would be wise to warn the client that he will be facing which of these risks? I. Liquidity II. Creditworthiness of the buyer III. Lack of assurance that the delivery price will remain stable IV. Location for the delivery may change A) II and III B) I and IV C) I and II D) III and IV
C) I and II
John is the owner of Mississippi Advisory Services (MAS), an independent financial planning organization. He is registered as an investment adviser representative of SSC Securities and Investments, registered as a broker-dealer, and an investment adviser with the SEC. Supervision over John's advisory activities is the responsibility of A) John. B) the SEC. C) SSC's CCO. D) MAS's CCO.
C) SSC's CCO.
Which of the following would be considered when determining whether excessive trading has occurred in a client's account? A) The performance of the account in comparison to other client's accounts B) The number of years the account has been opened C) The nature of the client's financial objectives D) The size of the companies issuing the securities
C) The nature of the client's financial objectives
Which of the following business entities files a tax return on the 15th day of the 4th month after the end of the calendar (or fiscal) year? A) Partnership returns on Form 1065 B) Multiple member LLCs on Form 1065 C) S corporations on Form 1120s D) C corporations on Form 1120
D) C corporations on Form 1120
As referred to in the NSMIA, the term covered security would apply to which of these? I. Preferred stock in the XYZ Corporation whose common stock is listed on the NYSE II. Common stock in ABCD, Inc., a stock traded on the OTC Link III. Springfield, Illinois, municipal bonds sold to a resident of Springfield, Illinois IV. Springfield, Illinois, municipal bonds sold to a resident of Springfield, Missouri A) I and II B) II and III C) III and IV D) I and IV
D) I and IV
Value investing is one of the popular portfolio management styles. Those who adhere to the value style to select stocks would be most likely to spend most of their effort A) charting the stock's market price using moving averages B) analyzing both micro and macroeconomic trends. C) seeking companies that are in the forefront of new technology D) analyzing the issuer's financial statements
D) analyzing the issuer's financial statements
Municipal bonds are often called tax-exempts. This refers to the exemption of their income from A) federal estate taxes. B) state, federal, and inheritance taxes. C) state income taxes. D) federal income taxes.
D) federal income taxes.
When a bond's NPV is zero, it is usually an indication that A) the bond is a zero-coupon bond. B) the bond is mispriced. C) the bond is highly rated. D) the market is highly efficient.
D) the market is highly efficient.
To comply with the safe harbor requirements of Section 404(c) of ERISA, the trustee of a 401(k) plan must I. offer plan participants at least three different investment alternatives II. ensure that plan participants are insulated from control over their portfolios III. allow plan participants to change their investment options no less frequently than quarterly IV. allow plan participants to purchase U.S. Treasury securities
(B) I and III
A customer has contributed $1,000 a year for 10 years to his tax-deferred nonqualified variable annuity. The value of the separate account is now $30,000. If the customer takes a withdrawal of $10,000, what are the tax consequences? A) The entire $10,000 is taxable as ordinary income. B) Any tax due is deferred. C) There is no tax because the withdrawal is considered return of capital. D) Two-thirds of the withdrawal is taxable as ordinary income.
A) The entire $10,000 is taxable as ordinary income.
An agent's client calls on Monday to discuss the current market situation. They discuss how 100 shares of Kapco common stock would be an appropriate addition to the client's portfolio. On Thursday, the client calls and tells the agent to place an order for the Kapco stock at whatever price the agent feels is best. The agent waits until Friday, purchasing the stock at a price $2 per share below Thursday's low. In this case, the agent acted A) improperly; the order should have been placed on Thursday. B) properly because the agent used discretion as to price and time. C) improperly; the order should have been placed on Monday. D) properly because the agent saved the client money.
A) improperly; the order should have been placed on Thursday.
A client wishing to hedge a long stock position would be most likely to: A) buy a call on that stock. B) buy a put on that stock. C) sell a call on that stock. D) sell a put on that stock.
B) buy a put on that stock.
Due to health reasons, Danny has decided to withdraw his registration as an agent. The withdrawal will take effect A) when authorized by his employing broker-dealer. B) on the 30th day after filing Form U5 unless the Administrator determines an earlier date. C) on the 30th day after filing Form U5. D) immediately.
B) on the 30th day after filing Form U5 unless the Administrator determines an earlier date.
Which of the following is not an annuity purchase option? A) Periodic payment deferred annuity B) Single premium deferred annuity C) Single premium immediate annuity D) Periodic payment immediate annuity
D) Periodic payment immediate annuity
Braydon has received preemptive rights from one of the stocks held in his portfolio. Which of the following is not an alternative regarding these stock rights? A) Exercising B) Selling at the market C) Giving the rights to his son D) Redeeming them from the issuer for cash
D) Redeeming them from the issuer for cash
According to the Uniform Securities Act, which of the following circumstances may not result in a prison sentence? A) The client did not lose any money. B) The adviser offered to cooperate in the Administrator's investigation. C) The client was not involved in the criminal action. D) The adviser proves that he had no prior knowledge of the rule or order violated.
D) The adviser proves that he had no prior knowledge of the rule or order violated.
One of the benefits of owning a home is the tax treatment of a sale of a primary residence. Under current IRS regulations, A) a married couple is permitted to exclude the first $250,000 of gain. B) all gains from the sale of a primary residence are excluded from taxation. C) a married couple is permitted to exclude the first $500,000 of gain as long as the proceeds are reinvested in another home. D) a married couple is permitted to exclude the first $500,000 of gain.
D) a married couple is permitted to exclude the first $500,000 of gain.
The Investment Company Act of 1940 requires certain types of investment companies to compute their net asset value on a regular basis. Excluded from this requirement are A) open-end management investment companies. B) closed-end management investment companies. C) unit investment trusts. D) face-amount certificate companies.
D) face-amount certificate companies.
An investment adviser should develop an investment policy based on the needs and objectives of the client. When the client is a business entity structured as a general partnership, the investment policy would have to consider A) the number of limited partners. B) the liability of the general partner. C) the mean requirement of the wealthiest and the poorest partner. D) the objectives of all the partners on a collective basis.
D) the objectives of all the partners on a collective basis.
One of the primary differences between trading on listed exchanges and trading in the over-the-counter market is that only on the exchanges are prices determined A) through a negotiation process. B) by an auction process. C) by the exchange itself. D) by the FINRA 5% markup policy.
B) by an auction process.
A client of a brokerage firm purchases 100 shares of ABC common stock at a price of $50 per share. On settlement date, the firm journals $2,500 from the client's money market account to pay for the trade. No further call for money is made. This trade must have taken place in a A) wrap fee account B) margin account C) cash account D) depository account
B) margin account
If applicable, disclosure of payment for order flow is required A) when the trade is in an exempt security. B) on the customer trade confirmation. C) on the customer order ticket. D) if requested by the customer.
B) on the customer trade confirmation.
Under the Uniform Securities Act (USA), it is unlawful to sell A) a federal covered security not registered in the state. B) a nonexempt, nonregistered security issued by a foreign corporation from a country with which the U.S. government maintains diplomatic relations. C) a security of a commercial bank not registered in the state. D) a security registered in the state under the USA but not registered in any other state.
B) a nonexempt, nonregistered security issued by a foreign corporation from a country with which the U.S. government maintains diplomatic relations.
Life insurance is generally purchased to replace the lost income of the insured. A client wishing to purchase a policy with a level death benefit and level premium for as long as the premiums are paid would choose A) a decreasing term policy. B) a whole life policy. C) a universal life policy. D) a 5-year renewable term policy.
B) a whole life policy.
If an individual makes a withdrawal from her IRA at age 52, she pays no penalty tax if she A) used the funds for her nephew's college tuition B) is disabled C) had no earned income that year D) has retired
B) is disabled
All of the following statements regarding bonds selling at a discount are correct except A) they can indicate that the issuer's credit rating has fallen. B) they are more likely to be called than comparable bonds selling at a premium. C) they can indicate that interest rates have risen. D) they will appreciate more than comparable bonds selling at a premium if interest rates fall.
B) they are more likely to be called than comparable bonds selling at a premium.
A federal covered investment adviser registered with the SEC that has offices in five states must do which of the following? I. Pay state filing fees if required by the Administrator. II. Notify the Administrator within one business day if net worth falls below the required minimum. III. Notice file in any of those states where required by the Administrator. IV. Become licensed as a broker-dealer. A) II and IV B) II and III C) I and III D) I and II
C) I and III
Under the Uniform Securities Act, any partner, officer, or director of a registered investment adviser is an investment adviser representative if that individual does which of the following? I. Offers advice concerning securities II. Manages client accounts or portfolios III. Determines securities recommendations for representatives to disseminate IV. Supervises personnel engaged in the above activities but does not sell these services to the public A) II and III B) I and II C) I, II, III, and IV D) I and IV
C) I, II, III, and IV
Under the Uniform Securities Act, the definition of person includes which of the following? I. An unincorporated investment club II. An individual who buys and sells securities only for his own account III. Associations and partnerships, whether or not they issue certificates IV. The U.S. government A) III and IV B) I and II C) I, II, III, and IV D) II and III
C) I, II, III, and IV
Your client's wife retired as a third grade teacher in 2019. She was covered under the school system's 403(b) plan. If she resumes employment with a corporate employer, and that new employer has a 401(k) plan, is she entitled to defer RMDs from the 403(b) plan past the regular age 73 date? A) RMDs may never be deferred for those who were participants in a 403(b) plan. B) RMDs may be deferred as long as the individual is employed on a full-time basis. C) RMDs may be deferred only from the plan sponsored by the current employer. D) RMDs may be deferred only if the current employer offered a 403(b) plan.
C) RMDs may be deferred only from the plan sponsored by the current employer.
The tendency of people to follow the actions of a larger group when making financial decisions, whether those actions are rational or not, is known as A) confirmation bias. B) anchoring. C) herd mentality D) overconfidence.
C) herd mentality
Which of the following is an allowable early withdrawal from a traditional IRA without a tax penalty? A) A single parent supplements a home equity loan with funds from her IRA to pay for a second home. B) A single parent withdraws funds from her IRA to pay for the education of a nephew. C) A person withdraws funds from his IRA to pay for elective cosmetic surgery. D) A wealthy individual withdraws $10,000 from his IRA to purchase his first principal residence.
D) A wealthy individual withdraws $10,000 from his IRA to purchase his first principal residence.
FinCEN Form 112, the Currency Transaction Report, is filed with A) the Federal Bureau of Investigation (FBI). B) the SEC. C) the National Security Agency. D) the Treasury Department.
D) the Treasury Department.
An investment adviser (IA) has a number of clients who need high-quality estate planning. These clients are referred to the Henry Law Firm, and in exchange, Henry sends those of his clients needing investment advice to the IA. The IA pays a referral fee to Henry of $300 for each referral who becomes a client. Under the SEC investment adviser marketing rule, A) this is permissible as long as all of the required disclosures are made and the investment adviser and Henry enter into a written agreement if the compensation exceeds the de minimis level. B) this is permissible only if disclosed to the Administrator. C) this type of arrangement is never permitted. D) this is permissible but does not need to be disclosed to clients because Henry is an attorney and this would be a violation of attorney-client privilege.
A) this is permissible as long as all of the required disclosures are made and the investment adviser and Henry enter into a written agreement if the compensation exceeds the de minimis level.
Watson, a customer of Gibraltar Securities, wishes to place an order to buy 50 shares of a thinly traded stock priced at $8 per share. Because the stock is so thinly traded, Gibraltar Securities feels it needs to charge Watson a commission of $100 to justify the time it must spend locating a seller of the stock. Which of the following statements best describes this action? A) Gibraltar Securities is not required to disclose the amount of commission in advance to Watson. However, it must receive clearance from the Administrator before charging commission in amounts exceeding 10% of the value of the securities traded under the transaction. B) It would not be considered a prohibited practice for Gibraltar to charge Watson $100 to complete the transaction, provided Gibraltar informed Watson of the $100 commission prior to the transaction and Watson chose to proceed with the trade. C) It would not be considered a prohibited practice for Gibraltar to charge Watson $100 to complete the transaction. D) A commission of $100 on a transaction involving $400 worth of stock would generally not be deemed excessive.
B) It would not be considered a prohibited practice for Gibraltar to charge Watson $100 to complete the transaction, provided Gibraltar informed Watson of the $100 commission prior to the transaction and Watson chose to proceed with the trade.
An investor invested $1,000 into the shares of the Stratford Growth and Income Fund, an open-end investment company registered under the Investment Company Act of 1940. On the purchase application, the investor checked the boxes signifying that dividends were to be paid out in cash and capital gains were to be reinvested. During year, the fund paid dividends of $20 and distributed a $250 capital gain. At the end of the year, the fund's value is $1,300. The total return to this investor was A) 30%. B) 27%. C) 32%. D) 25%.
C) 32%.
Under the Securities Exchange Act of 1934, an exchange is A) a disposition of a security for value B) an organization of securities professionals designed to promote fair practices in doing business with the public C) an organization that provides facilities for bringing together buyers and sellers of securities D) any transaction involving a security
C) an organization that provides facilities for bringing together buyers and sellers of securities
An income-oriented customer has a discretionary account with an agent. If the agent purchases speculative growth stock on behalf of the customer, under the Uniform Securities Act, this is considered A) a wash trade. B) an acceptable transaction. C) an unsuitable transaction. D) a matching activity.
C) an unsuitable transaction.
Under the Securities Act of 1933, the SEC A) approves securities registered with it. B) passes on the investment merit of the security. C) attempts to make certain that all pertinent information is fully disclosed. D) guarantees that the statements made in the prospectus and registration statement are accurate.
C) attempts to make certain that all pertinent information is fully disclosed.
In accordance with the stated provisions of the Investment Company Act of 1940, renewal of an open-end management investment company's investment adviser's contract must be approved by A) the principal underwriter of the fund. B) FINRA. C) majority vote of the fund's board of directors or of the outstanding voting shares, as well as by majority vote of the noninterested members of the board. D) the SEC.
C) majority vote of the fund's board of directors or of the outstanding voting shares, as well as by majority vote of the noninterested members of the board.
A bond analyst reports that there is currently an inverted yield curve. That would mean A) the further the bond is from its maturity date, the higher the yield. B) bonds with intermediate maturities have the highest yields. C) the closer the bond is to its maturity date, the higher the yield. D) the closer the bond is to its maturity date, the lower the yield.
C) the closer the bond is to its maturity date, the higher the yield.
Which of the following statements describes a person who provides investment advice on a regular basis but does not charge fees, yet would be considered an adviser under Release IA-1092? A) A retired chief investment officer of a well-known investment management company, without compensation, writes a column in a general circulation newspaper commenting on the value of investing in equity securities; many readers find his advice useful and become clients of his former investment management company. B) A wealthy college professor gives free lectures on sound investment practices and makes specific securities recommendations based on a quantitative model he has developed. C) The secretary of the U.S. Treasury, as part of his official duties, comments on conditions in the financial markets and their future investment implications. D) A financial planner sold his business and spends his time consulting with pension plans on whether to retain or hire new investment managers based on their performance. He does not charge fees; however, those managers retained as a result of his recommendations routinely provide him with noncash benefits such as vacations, computers, and office space.
D) A financial planner sold his business and spends his time consulting with pension plans on whether to retain or hire new investment managers based on their performance. He does not charge fees; however, those managers retained as a result of his recommendations routinely provide him with noncash benefits such as vacations, computers, and office space.
The Uniform Securities Act provides for both civil and criminal prosecution. In which of these cases might an agent face civil liability? I. A sale was made of an unregistered, nonexempt security. II. During a sales presentation, the agent misstated a material fact that resulted in the prospect deciding to make the purchase. III. The agent was included in the judgment, along with the broker-dealer, for a civil infraction. A) I and II B) II and III C) I and III D) I, II, and III
D) I, II, and III
Under the provisions of the Uniform Securities Act, which of the following transactions may be made legally with unregistered, nonexempt securities? A) A sale in a discretionary account B) A rights offering C) A private placement D) A public offering
C) A private placement
Mark's company, which is located in Oregon, makes unfinished wood furniture. His company sells this furniture directly to the public from a large warehouse. Theresa's company, which is located in southern Georgia, grows cotton for t-shirt manufacturers. Which of the following statements correctly identify hedging strategies for Mark and Theresa? I. Mark should buy lumber futures. II. Theresa should sell cotton futures. III. Mark should sell lumber futures. IV. Theresa should buy cotton futures.
(A) I and II
Which of the following persons are required to register in a particular state? I. An investment adviser who manages client accounts in excess of $100 million in value II. An investment adviser who manages client accounts and has less than $25 million in total assets under management III. An adviser to investment companies registered under the Investment Company Act of 1940 IV. An investment adviser representative with a place of business in the state
(A) II and IV
Which of the following is a direct obligation of the U.S. government? A) Ginnie Maes B) Bank for cooperatives bonds C) Fannie Maes D) Government bond mutual funds
A) Ginnie Maes
In which of the following cases would the Uniform Securities Act require registration of an investment adviser who had no place of business in the state? A) He had more than five noninstitutional clients who were residents of the state. B) Under no circumstances is registeration required if there is no place of business in the state. C) His website was seen by residents of the state. D) He had more than five institutional clients domiciled in the state.
A) He had more than five noninstitutional clients who were residents of the state.
Potential investment company clients should be advised to investigate a fund by looking at which of the following? I. Investment policy II. Number of shares outstanding III. Custodian bank IV. Portfolio A) I and IV B) II and III C) II and IV D) I and III
A) I and IV
Under the USA, which of the following are grounds for suspension, denial, or revocation of an issuer's registration statement? I. Information in the registration statement is incomplete II. Unreasonable compensation to the underwriters III. Failure to pay filing fees IV. The security is subject to an administrative stop order in a federal court. A) I, II, III, and IV B) II and IV C) I and III D) I and II
A) I, II, III, and IV
Which of the following are exempt from the registration requirements of the Uniform Securities Act? I. Securities issued by a nonprofit organization II. Securities guaranteed or issued by a federal savings and loan III. T-bills IV. Unit investment trusts registered with the SEC A) I, II, III, and IV B) I, II, and III C) I only D) II, III, and IV
A) I, II, III, and IV
Hal and Amy are covered by a pension plan at Benson Industries, Inc., where they are both employed as executives. Their incomes total $300,000 per year, and they file a joint tax return. Which of the following best describes what they can do in a regular IRA program for the year 2023? A) They may contribute $6,500 each, but they cannot take a deduction. B) They may make an $13,000 deductible contribution. C) They cannot have an IRA because they are covered by a pension plan. D) They may each make a $6,500 deductible contribution.
A) They may contribute $6,500 each, but they cannot take a deduction.
Which of the following securities is not exempt from the registration provisions of the Securities Act of 1933? A) A high-quality corporate promissory note maturing in 180 days B) A new stock being offered in three states C) A U.S. government bond D) An equity security issued in only one state and solely to residents of that state
B) A new stock being offered in three states
When reviewing the prospectus of a mutual fund, you would be most likely to find a discussion of breakpoints dealing with which share class? A) Class B B) Class A C) Class C D) Class R
B) Class A
Adnan is an investment adviser representative associated with a state-registered investment adviser. He is registered in several states. To be in compliance with the Uniform Securities Act, Adnan A) must meet the financial requirements of the state in which the investment adviser's principal office is located. B) must meet the financial requirements of the state with the most stringent requirements. C) must meet the financial requirements of all of the states in which he does business. D) has no financial requirements with regard to a minimum net worth.
D) has no financial requirements with regard to a minimum net worth.
A customer who follows a strict dollar cost averaging program to acquire shares in a diversified common stock mutual fund should achieve A) allocation among various funds within a single investment company's family of funds B) significant reduction of market risk due to enhanced diversification C) reasonable assurance against loss of principal, presuming the customer dollar cost averages over an extended period D) lower average cost to acquire fund shares relative to the fund's average price over the buying period
D) lower average cost to acquire fund shares relative to the fund's average price over the buying period
Five years ago, an investor purchased an ABC Corporation BBB-rated debenture with a coupon of 6% maturing in 2037. Currently, new BBB-rated debentures maturing in 2037 are being issued with coupons of 5%. Based on the discounted cash flow method, one could say that the present value of the investor's security is A) equal to the par value B) positive C) less than the par value D) more than the par value
D) more than the par value
