SIE Exam Questions
Penalty to takr RMD
50% excise tax on under distributed amount
Minimum amount for SAR
5000
The maximum annual contribution in a Roth IRA is
6000
How much is the initial and catch up limits for an IRA
6000 or 7000 with catchup, 100% of earned income lower of the two
An order is placed to buy 100 shares at $61.55. The company then declares a cash dividend of 30 cents per share. What will the order price be adjusted to, before the open on the ex-dividend date?
61.25
50 years and older can contribute how much to a roth ira
7000
How much assets of REIT has to be in RE
75%
The minimum amount of taxable income that REITs must distribute each year to shareholders is
90%
Durable power of attorney
a legal agreement that allows an agent or representative of the patient to act on behalf of the patient
Regulation S
exempts offshore offerings from SEC registration requirements. US companies can also use this exemption to raise capital in offshore markets without a registration statement. (14-408)
Who does the MSRB regulate?
broker dealers Bank dealers that engage in s&t , underwriting or financial advice to issuers NOT over the issuer themselves
closing purchase
buying call or put
If rates decline does a discount or premium bond change more
discount
Every year a mutual fund will examine its operating expenses as a function of the average dollar value of its assets under management. This item is published as the mutual funds'
expense ratio
Nonqualified withdrawals from Section 529 College Savings Plans are subject to which of the following?
federal + state taxes 10% penalty
What are CUSIP numbers used for
identify securities in the clearance and settlement process
integration (money laundering)
illegal funds mixed with legitimate funds
how long to vest a traditional IRA
immediately
The payment of any taxes owed in a UGMA/UTMA account is the responsibility of the
minor
A client of a registered rep has moved to a state in which the rep is not registered. If the client now wishes to place a trade, the rep
must forward to sale to a different collaeague
intimidation would most likely include ******
negotiation Chapter 9.5.5
When are RMDs required for ROTH IRA
never
Is the MSRB in charge of registering muni securities
no
are dividends passive income
no
are interest passive income
no
Third Market
off-exchange market for securities listed on an organized exchange
A master limited partnership is an investment vehicle which is
offered to the public and traded on securities exchanges
How are closed end funds shares traded
on the secondary market Supply and demand Not at NAV (Not calculated daily) Intraday
Are mutual funds closed end or open ended
open ended
457(b)
participant directed ERISA deferred compensation plans
Statutory powers
passing a law that will authorize a local municipality to proceed with issuance of a general obligation bond
FINRA Rule 3240
permits a registered rep to borrow money from or lend money to a client provided that the firm has written supervisory procedures permitting such an activity
Securities act of 1933
provide full and fair disclosure to investors. prohibit fraud
403 B
public employees retirement plan such as teachers
emergency contact in continuity plan
registered principal member of senior management
Institutional Communication
written and/or electronic communication directed ONLY to institutional investors
Are bounties given to tip off insider trading
yes
Can retail clients have a price target
yes
Does a principal have to approve retail communication
yes
Investors in Roth IRA's may make i. pre tax contributions ii. post tax contributions iii. tax free distributions iv. taxed at federal level not state v. taxed only at retirment
2 and 3 Post tax Tax Free
529 tax deductions: state or federal?
State level only
Control Person
(1) A director, an officer, or another affiliate of an issuer. (2) A stockholder who owns at least 10% of any class of a corporation's outstanding securities. Related item(s): affiliate; insider. Holding period restriction Volume Limit Restriction
orders marked GTV
**
bona fide repurchase agreements
***
Premium, Par, Discount and yields for bonds diagram
******************
variable annuities
- Payments fluctuate according to the value of an account invested primarily in common stocks - provides conservative to aggressive investments that are not guaranteed
A firm's anti-money laundering program is required to include all of the following provisions
-Meet the requirements of the Bank Secrecy Act and the Department of the Treasury. -written program and designate an Anti-Money Laundering Compliance Officer - independently tested for compliance on an annual basis.
repurchase agreements
-buys and then sells securities to primary ---taking money out of the system -tightens credit.
G-37
-prohibits municipal firms from engaging in municipal securities business with an issuer for two years after any political contribution is made to an official of that issuer (negotiated underwriting) -up to $250 per election
clearinghouse
. The clearinghouse validates and finalizes the transaction, ensuring that both the buyer and the seller honor their contractual obligations.
How much net worth should a married couple have to be a HNW
1 Million
How much net worth should one person have to be a HNW
1 Million
three prohibited activities for mutual funds:
1 short 2. margin 3. joint account
With regard to UGMA and UTMA accounts, which two of the following statements are TRUE? I. The custodian and the donor must be the same person II. The Social Security number of the minor must be listed on the account III. There is no annual limit on the size of the gift IV. There may be more than one minor listed on the account
2 and 3 UGMAs and UTMAs are custodial accounts established for the benefit of a minor. The adult that makes the gift (the donor) may name someone else as custodian of the account. There is no annual limit on the size of the gift, although gift tax may apply if the gift exceeds the annual gift limit. There may be only one custodian and one minor per UGMA or UTMA accounts.
Features of a CD 1. FDIC Insurance 2. Fixed Maturity 3. Resold 4. Interest Payable through maturity
1,2,4
Martin opens his first Roth IRA on March 31, 2014, at age 56. What is the first date on which he can take a qualified distribution that is tax-free?
1-Jan-19
Registered reps opening an account at a different firm needs what
1. Prior written consent from current employer 2. Notify firm opening account with that you are a RIA
ADR may be quoted on OTCBB if
1. Registered with SEC 2. Not listed on U.S. securities exchange
On February 1st a customer purchases a municipal bond for settlement on February 3rd. The bond pays semi-annual interest on January 15 and July 15. How many days of accrued interest are added to the buyer's price?
18 days The calculation of accrued interest includes interest on the prior payment date up to, but not including the settlement date. Municipal bond accrued interest is calculated based on 30-day months. If you start counting on the 15th of a 30 day month, there are 16 days of interest. There are 2 additional days in February for a total of 18 days of interest.
Sharing in customer accounts allowed if
1. authorization from the firm 2. authorization from the Customer 3. Proportionate ownership
Rules against antimanipulation in primary markets sales comes from 1933 or 1934
1933
Who is a registered rep allowed to borrow from
1. extended family 2. regular banks 3. personal/business relationship outside BD
Registered rep shares account conditions
1. firm approval 2. customer approval 3. proportionate (not for family)
Material event notices must be submitted to the MSRB within
10 business days
Issuers are required to provide to FINRA notice of stock splits and stock dividends
10 days prior to record date
When do penalties occur on early withdrawls
10% if no exception (disability, education, home buyer, medical expense, death of owner)
FINRA rules limit the annual value of a gift given by a member firm to an employee of another member firm to
100
How much is a basis point
100 basis points is 1% so 1 basis point is 0.01% or 0.0001
How many people must own a REIT
100 people
How much is a bankers acceptance
100k
Unless eligible for an exception, municipal trades must be reported to the Real-time Transaction Reporting System (RTRS) within
15 minutes
A municipal financial professional with your firm wishes to support the campaign of a local candidate for mayor who is also employed by your firm. MSRB rules permit which of the following? How much contribution
250 per candidate per election
How many years does advertising have to be maintained
3 years FINRA 4 years MSRB
How much income is required for HNW individual
200,000
Requirements of ERISA
21+ 1+ year work service with employer Non discriminatory (to every employee)
Correspondence
25 fewer retail 30 calendar day
Retail communication
25+ retail 30 calendar day period
MSRB definition of correspondence
25- 90 days need reviewing procedures not approval procedures
MFP max contribution
250
How fast submit U5
30 days
SARS must be filed within how many days and with whom?
30 days FinCen
According to FINRA rules, the minimum maintenance requirement for a short margin account is
30%
How much income is required for HNW married couple
300,000
Civil penalties for insider trading
3x for treble damages
Criminal penalties for insider trading
5 million fine 20 years jail
In what capacity is a Registered Investment Adviser (RIA) required to put clients' interest first and adhere to duties of loyalty and care?
Fiduciary
cooling off period
Filing to declared effective
The inputs for calculating yield to call (YTC) include the bond's current market price, par value, and what else?
First call date and any call premium
An individual that invests in a unit investment trust holds
Fixed interest Held until date of termination
S corp
A legal entity that offers limited liability with single taxation.
If someone is age 56 and withdrawl from their retirement account what happens (surrender chargess dont apply)
Still a 10% fee applies because ts before 59.5
Selected Dealer Agreement
Stipulates terms for selling group
How does a bond trade when in default
Trades flat
RMDs for Roth for 401k
Traditional IRA - use IRS tables, April 1 after 72 ROTH never
A registered representative of a municipal securities firm has just been elected mayor of his small city. The city is preparing to issue new bonds to build a police station. This relationship is I. prohibited; the representative cannot hold the position of mayor and continue his current sales responsibilities II. not prohibited; the representative can hold the position of mayor and continue his current sales responsibilities III. a financial advisory affiliated relationship IV. a control relationship
A control relationship exists when a brokerage firm or an employee of a firm is in a position to control or influence the issuance of securities by an issuer. Control relationships are not prohibited but are subject to stringent disclosure requirements.
Who must approve an options account before trading begins?
A Reigistered options professional
Jane, a member of the deal team structuring an IPO for a client company, discovers during due diligence that the company does significant business with the Cuban government. After consulting with her manager and the firm's AML compliance officer, Jane's broker-dealer decides to file a Suspicious Activity Report. Under federal AML regulations, this report should be filed
A SAR must be filed with FinCEN within 30 days of the discovery of the suspicious activity, regardless of when the firm actually decides to file the report.
Summary Prospectus?
A Summary Prospectus is a compilation of highlights from the longer, standard prospectus of a mutual fund. This document may be delivered to shareholders of a mutual fund.
If a corporation fails to make a payment on an outstanding debt obligation,
A bond will default if the issuer fails to make an interest or principal payment on the security. The issuer is legally obligated to make these payments, per the conditions of the security.
An individual may be subject to statutory disqualification if he or she has committed a felony within the past
A person may be subject to statutory disqualification if he or she has committed a felony or a misdemeanor involving securities within the past 10 years.
529 plan
A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs
Under the terms of a selected dealer agreement, participant firms
A selected dealer agreement specifies the terms between the managing underwriter and the selling group members. Selling group members act as agents because they have no financial responsibility for unsold securities. Distributions subject to a selected dealer agreement include both registered and exempt securities (e.g. municipal bonds).
A firm commitment underwriting in which shareholders with pre-emptive rights may maintain their proportionate ownership interest before the securities are purchased by the underwriting manager is a
A standby commitment is a type of firm commitment underwriting that applies when additional shares are issued, and current shareholders have pre-emptive rights. In this arrangement, the securities are offered to the public for a 2- to 4- week standby period. The underwriter will purchase for resale any of the shares that are not subscribed to during the standby period.
Which of the following statements regarding statutory disqualification are TRUE? I. An individual or firm may be subject to a statutory disqualification II. Certain persons may re-enter or continue in the securities industry following a statutory disqualification III. Disqualifying events can include bars, injunctions suspensions and expulsions from certain activities, SROs and exchanges IV. Once it becomes aware of a statutory disqualifying event a member is obligated to report the event to FINRA
A statutory disqualification occurs when an individual or member firm has violated securities regulations and has been barred, suspended, expelled, enjoined, fined or possibly jailed for the activity for a period of time. Whenever a member firm becomes aware of a statutory disqualification it is required to report the event to FINRA. Certain persons or firms may be allowed to continue in the securities industry following a statutory disqualification but only with written approval from FINRA and heightened supervision.
A stop order is entered as "Sell 250 shares stop at $53.70." If the order remains unfilled, then
A stop order becomes a market order when the stop price (or better) is hit. If this sell order hasn't become a market order and filled, the market price is above the stop price.
The XYZ mutual fund offers a dividend reinvestment plan to its investors. When an investor chooses to reinvest their dividend,
A tax liability will be incurred even though the investor did not take the dividend in cash.
What is a solicitated trade?
A trade that originates from and is initiated by a registered representative (recommending a securities transaction to a customer).
Regulation D offering
A type of exempt offering that is sold directly to accredited investors and a maximum of 35 nonaccredited investors. Also called Private Placement, Restricted Stock, Lettered Stock, Legend Stock
A revocable trust can be altered or cancelled
A) At the discretion of the trustor.
Which type of advisers must be registered with the SEC?
A) Large advisers
If Paul makes a $5,000 contribution to his Roth IRA, how much will it reduce his taxable income?
A) Zero Not tax deductible but earnings are
Which of the following is a correspondence according to MSRB rules? A) Letter to a client B) Television commercial C) Summary of the Official Statement D) Newsletter
Any written or electronic message distributed to less than 25 persons within a 90 day period.
Who is eligible to have an ABLE account?
Anyone who was diagnosed with a disability prior to age 26
Who is eligible to set up a Traditional IRA?
Anyone who works and their spouse
Qualified Institutional Buyer (QIB)
At least $100 million in securities Financial institutions, pension funds, corporations, insurance companies, investment companies, or employee benefit plans, or an entity owned entirely by qualified investors. Known outside the United States as a qualified institutional investor (QII).
For which students is the cost of room and board a qualified education expense from a 529 plan?
At least half-time students only
When are UITs priced
At the end of each day
If a wife of a registered rep wants to open another brokerage account what must happen
Approval of firm Notice of BD wife is opening account at
If FINRA or the SEC issues an order that imposes a suspension of the registration of a registered representative, the representative is prohibited from
Associate with the firm in any capacity
Discount bonds being adjusted up is
Accretion
What determines if a trade is discretionary
Action Asset OR quantity
When are RMDs required for Traditional IRA
After 72 April 1st after
When are mutual funds priced
At the end of each day
A short call is in-the-money when
All call option positions (long and short) are in-the-money when the market value of the underlying stock is above the strike price. The premium affects the investor's profit or loss but not whether the position is in-the-money.
What type of money is contributed to a 529 plan, for federal income tax purposes?
All money contributed to a 529 plan is post-tax for federal purposes. However, some states offer income tax deductions, for state income tax purposes.
Free writing propsectus
Allows issuers to provide additional information to investors beyond whats in the prospectus / registration statement
Central securities depository (CSD)
Allows trading in book entry format Instead of physical paper exchange
What is the amount of securities that control persons can sell within 90 days after filing a Notice of Proposed Sale with the SEC?
An amount not to exceed the greater of 1% of the outstanding shares of the same class of stock being sold, or the average reported weekly trading volume during the four weeks preceding the sale.
Reg D
An exempt transaction under the Securities Act of 1933 for private placements
Rule 144A
An exemption to the holding period and volume restrictions of Rule 144 for qualified institutional buyers (QIBs)
What is a limited partnership
An investment structure where limited partners have limited liability and general partners have unlimited personal liability is a(n)
An individual who has made an initial payment for an immediate annuity contract owns
Annuity units because of payout
A customer complaint involving theft or forgery must be reported to FINRA within how long and with what dollar amount
Any amount Within 10 days
An arbitrator can be what
Associated with FINRA Or Public arbitrator
A communication about a variable annuity emphasizes the liquidity benefit of being able to withdraw funds at any time. This must be balanced by a description of
Charges, tax liabilities and penalties on withdrawals
Types of indicators: Inventory/sales ratio Personal Income Consumer Spending Interest Rates
Coincident Coincident Coincident Lagging
Which types of securities are quoted on the OTCBB?
Foreign stocks, Us Stocks, warrants and DPPS, ADRs NOT Bonds
A buyer of a municipal security must receive the official statement from a municipal securities firm
B) No later than the settlement date of the transaction
Under a negotiated sale, the issuer
B) and the underwriter agree on the terms and fees of the offering
Covered call
writing a call on an asset together with buying the asset
A new issue of municipal securities is coming to market through a negotiated underwriting. The spread for this issue is the difference
Between the price paid to the issuer and the price initially offered to the public.
The initial privacy notice that is provided to a new customer must include all of the following
Type of info collected How it will be used How its safegaurded
In which types of orders are specified prices reduced by the amount of dividends paid on the ex-dividend date, unless a do-not-reduce (DNR) instruction is used?
BLiSS Buy limit Sell Stop
What events allow something to be removed from UIT
Bankruptcy, decline in credit rating, Fraud, sell due to M&A
How do closed end funds trade
Based on supply and demand Intra day
How can you sell back a UIT
Between the investor and the fund
Bond Trading "Flat"
Bond trading without accrued interest due to issuer being in default.
In which of the following areas are open-end funds and unit investment trusts similar?
Both redeem shares at NAV
Dealer capacity
Broker dealer trading for themselves
Patty is short 1,000 shares of ABC. She still believes that ABC will decline, but wants to make sure that she limits her potential losses on the position. How would you advise Patty to hedge this position? Sell puts place a sell stop Buy puts Buy calls
Buy calls
***** What type of open orders must be adjusted for corporate events that affect a security's price and/or number of shares?
Buy limit orders
opening purchase
Buying call or put
Principal Trade
Buying customer pays mark-up. The seller a mark-down. Principal- in charge of yourself
How do you get in an MLP?
By buying MLP shares on an exchange Units trade freely on exchanges
The tax advantages a limited partnership offers
Limited partnerships should be recommended only to investors who can benefit from the tax features that are available. The passive losses that are passed through may be used to offset other passive income only.
What is the first action SIPC takes to protect investors?
Locate and replace any lost securities
FOMC long term does what
Long term check inflation Stop recessions
When compared to a corporate debenture, a mortgage bond I. tends to yield a lower rate of return II. tends to yield a higher rate of return III. has higher priority in a corporate liquidation IV. has lower priority in a corporate liquidation
Lower return Higher priority
A comparison of an S-Corp and a C-Corp will show that
C corp is taxable S corp isnt
Under FINRA rules, which two of the following statements about joint accounts with customers are TRUE? I. They are never permitted between broker-dealers and customers. II. They are permitted between broker-dealers and customers under limited and highly supervised circumstances. III. They are never permitted between representatives and customers. IV. They are permitted between representatives and customer under limited and highly supervised circumstances.
C) II and IV FINRA rules allow both a firm and rep to have a joint investment account with customers as long as the proper approvals are obtained. Generally, the sharing must be proportionate with contributions made by each party, though if a registered representative has a joint account with an immediate family member, then direct proportionality does not apply.
Yield Rankings (Premium)
Lowest to Highest: YTC YTM CY Nominal
Who issues CUSIP numbers
MSRB
affiliates/insiders
Officers like CEO, CFO Board members 10%+ ownership
What backs SIPC
Only SIPC no F in SIPC
Separate Account is what type of investment company
Open ended Under Investment Company Act of 1940
Limit orders
Can be executed partially
Rule 147
Can sell securities within the state without registering with SEC
An individual who has not completed the Regulatory Element when required
Cannot be compensated for any activities that require registration
When securities are purchased by investors in a Regulation D private placement, what determines the required holding period, before they can be sold?
Companies that report financial information to the SEC are considered public companies. Securities acquired through private placements are restricted or control securities. If these securities are issued by a public company the minimum holding period until resale is six months. Otherwise, it is 12 months.
In which type of underwriting is a securities issuer most likely to get the best price with the least risk?
Competitive bid, firm commitment
Enforcers of MSRB
Comptroller FDIC Fed Reserve Non-bank -FINRA
When must the brokerage firm deliver a customer confirmation to the customer?
Confirmations must be delivered to customers at or before completion of each transaction.
Registered Rep G is walking down the hall of his firm and hears somebody whisper on the phone "block buy of ABC Co. tomorrow." He doesn't know any details about the trade, such as buyer or quantity. But he decides to buy a few shares for his own account anyway, because there has not been any public word about such a block trade. Is he front-running?
Correct Answer: Yes, because partial advance knowledge of a block trade is enough
Agency trade
Customer - buyer or seller - pays a commission. Acting as an agency for customners
Form ADV
Registration for an investment adviser
Securities Exchange Act of 1934
Regulates trading markets, broker-dealers and their associated persons.
FINRA rules regarding outside business activities
Require that representatives notify their firm of outside business activities and follow other procedures as required by the firm Do NOT need permission
All of the following are subject to the rules of the MSRB EXCEPT A) Individuals that sell municipal securities to institutional customers B) Underwriters of municipal securities C) General securities firms that distribute municipal securities D) Issuers of municipal securities
D) Issuers
Event notices
Required updates that disclose material information from state and local governments and other parties are called
A registered representative has become deficient in making timely payments on his credit card, resulting in a reduced credit standing. This activity must be
D) reported to the compliance department of the firm.
investment company act of 1940
Requires Face amount certificate companies, unit investment trusts and management companies to register with the SEC
where is the do not call list
FTC
Depositories and clearing corporations
Facilitate exchange of securities and resulting payment between investors Take on counterparty risk
What is the standard for a broker and the muni market
Fair and reasonable
when is notice/permission NOT required for a registered rep borrowing from person x
Family member Bank at market terms
What type of taxation is treasury notes securities subject to
Federal
Securities Act of 1933
Requiring new securities to be SEC registered
FINRA Rule 5130
Restricts those associated with the issuer from squeezing out the public. bona fide
FNMA
Federal National Mortgage Association (FNMA) is a government-sponsored enterprise that purchases and securitizes mortgages to ensure that funds are available for lending to home buyers.
Federal Farm Credit Banks are taxed at whal levels
Federal only
Statutory disqualification
Felony or misdemeanor past 10 years Cant associate with firm
Finra rule 2210 types of communication
Retail communication Correspondence Institutional communication
Face Amount Certificate
Debt security issued by face-amount certificate companies, one of three categories of mutual funds defined by the INVESTMENT COMPANY ACT OF 1940. The holder makes periodic payments to the issuer, and the issuer promises to pay the purchaser the face value at maturity.
What does REG D allow you to do?
Distribute securities in a private placement without filing a registration statement with the SEC
Declaration date
Dividend is declared
When is the roadshow
During the cooling off period
Finra 2210
Electronic communication cannot be made to 25 or fewer retail investors in any 30 calendar day period
FINRA treats instant message communications the same as
FINRA rule 5130
Ensure that underwriters make a bona fide public offering of all new issues by prohibiting them from selling new issues to the accounts of restricted persons.
Free-riding
Entering to trade/buy securities then selling them without having sufficient funds to pay for the trade
How many units do equity UITs issue
Equity UITs issue as many units as necessary during their IPO
How many fiduciaries must an ERISA-covered plan identify in its written plan document, at minimum?
Every ERISA-covered retirement plan must have at least one fiduciary identified in a written plan document.
How is US Governement securities taxed
Exempt at state Taxed at Federal
Balance of trade
Exports - imports
A registered representative has been asked to serve on the Board of Directors of a local corporation. The registered representative I. must provide written notice to his employer II. is not required to give notice if the position is unrelated to securities or finance III. must receive written permission from his broker-dealer before accepting the position IV. is not required to receive written permission from his broker-dealer before accepting the position
FINRA requires that registered representatives provide prior written notice to their firms before accepting outside employment or positions as officers, directors, or partners. Written permission from the firm is not required.
Assuming all conditions are met for payment of continuing commissions after a registered representative retires, on which accounts can these commissions be paid?
FINRA rules allow retired registered representatives to receive commissions from customers' accounts that were opened prior to the retirement.
Fund XYZ has an NAV of $10 per share and a POP of $9 per share.
Fund XYZ is a closed-end fund
What fees apply to selling a closed end fund
Fund administrative costs Sales commision
An investor looking to earn tax-free income, while also minimizing risk would likely purchase
GO Bonds Of these answer choices, general obligation bonds are the only option backed by the taxing power of the issuing municipality.
Ad valorem taxes would most likely back which of the following bond issues?
GO Bonds of cities
Which securities settle on a T+1 settlement cycle?
Government securities and options
Which of the following is not a type of Investment Company? Hedge fund Unit Investment Trust Face amount certificate Management Company
HF
Clearing firm
Handles back office details of the trade to ensure transaction successfully settles
Jack takes a $10,000 distribution from his 529 plan and uses none of the money for qualified educational expenses. $8,000 is basis and $2,000 is earnings. What penalty will he owe, in addition to regular income tax?
He will owe a 10% penalty on the taxable portion of the distribution the $2,000 of earnings. 100% of earnings is taxable because he has no qualified educational expenses. The penalty is $200.
Which two of the following statements about hedge fund regulation are TRUE? I. They are subject to the Investment Company Act of 1940 II. They are exempt from the Investment Company Act of 1940 III. Large hedge funds must usually register with the SEC IV. They are usually exempt from the Investment Advisors Act of 1940
Hedge funds are different than most packaged products because they are exempt from the Investment Company Act of 1940 if they follow limitations on the number and types of purchasers. This allows then much greater flexibility in trading strategies and operations. The Investment Advisors Act of 1940 requires that large hedge fund advisors register with the SEC while smaller funds are registered and regulated by the states.
Joyce files a joint tax return with her working spouse, but Joyce does not work or earn compensation. If she contributes to a Traditional IRA, whose name will it be in?
Her name
Limited partnership interests which are sold without specific definition of the assets that are held are
High risk Blind pool
Which of the following cannot back a GO bond Ad valorem tax Sales Tax Hotel Occupancy TAX Acts of state legislature
Hotel occupancy taxes
Which two of the following have the greatest impact on the size of the budget deficit? I. Fiscal policy of the U.S. Government II. Economic fluctuations III. Defense Spending IV. Spending for domestic social programs
I and II
company's stock is listed on the NYSE. Which of the following could result in the company being delisted? I. The company files for bankruptcy under Chapter 11. II. The company issues only nonvoting common stock. III. Public interest in the stock declines considerably. IV. The company does not mail out proxy statements.
I, II, III and IV Reasons for delisting on the NYSE include low trading volume, bankruptcy, considerable declines in public interest in the security, or if the firm does not issue traditional common stock.
Which of the following business structures allows for pass through of losses to investors? I. Limited partnerships II. Subchapter S corporations III. Limited liability corporations
I, II, and III
Arrange the steps that are followed in the liquidation of a limited partnership from first to last.
I. Secured lenders II. General creditors III. Limited partners profits IV. Limited partners return of contribution V. General partner fees VI. General partner share of profits VII. General partner return of contributed capital
The pre-dispute arbitration clause that is signed by a registered representative when the Form U-4 is completed requires arbitration as a means of settling a dispute I. Involving employment discrimination II. Between the representative and another representative at the firm III. Between the representative and her supervisor
II and III When representatives sign a Form U-4 pre-dispute arbitration clause they agree to arbitrate any dispute, claim, or controversy that arises between the representative and the firm, a customer, or other person. Employment discrimination and sexual harassment disputes are not required to be arbitrated.
Which of the following are likely to occur when the Fed buys securities from primary dealers? I. Banks will be inclined to lend less II. Banks will be inclined to lend more III. There will be downward pressure on the fed funds rate IV. There will be upward pressure on the fed funds rate
II and III When the Fed buys securities, it injects funds into the banking system, giving banks more to lend and putting downward pressure on the fed funds rate. When the Fed sells securities, money comes out of circulation, so the opposite occurs.
Can college students contribute to a Traditional IRA?
IRA contributions are age-blind, up to age 72, as long as the individual has earned income. Individuals of all ages are allowed to contribute if they have earned income. The maximum contribution is limited to 100% of compensation, up to a dollar limit.
A broker-dealer is acting as a trustee for an issuer, holding ownership information of that issuer's common stock. The broker-dealer may use this ownership information to solicit additional business for itself
If the issuer consents to this
Which of the following is not a benefit of most types of non-qualified executive compensation plans? Flexibility to choose which employees participate Avoidance of nondiscrimination tests An immediate tax deduction No limits on income that can be contributed
Immediate tax deduction Unlike qualified retirement plans, most types of non-qualified plans do not create an immediate tax deduction for the company, meaning that contributions are after-tax.
portfolio income
Income generated by selling an investment at a higher price than you paid for it
Decreasing dollar value does what to the balance of trade
Increase it
The fixed rate of return offered by preferred stock or bonds is a primary factor when considering
Inflation risk
ETfs and Closed end funds trade
Intraday
The calculation of NAV by a closed-end fund
Is a benchmark for the trading price of the shares which is set by supply and demand
When a UIT reaches the termination date specified at its creation, the trust
Is dissolved and no longer active
FINRA prohibits members from accepting payments from which entities for publishing quotes or market making?
Issuers, their affiliates and promoters
Which of the following is TRUE of the yield of a bond that is trading at a price that is $80 more than its face value?
Its coupon yield will be higher than its current yield
How are LPs regulated as
Limited partnership interests are considered securities and are subject to SEC registration and state blue sky laws.
Refunding
Retiring an outstanding bond issue at maturity by using money from the sale of a new offering is known as
Through which function do broker-dealers engage in the lending business and earn interest on loans of cash or securities to their customers? Custody Clearing Margin Settlement
Margin
When a stop price is hit, a stop order turns into what type of order?
Market sell
Which two of the following documents would be considered an advertisement under MSRB rules? I. a dealer offering sheet II. an abstract of an official statement III. a form letter IV. an interoffice memo
Materials prepared by dealers, or third parties on their behalf, that is designed to communicate with the public are advertisements. Preliminary Official Statements, Official Statements, dealer offering lists, and memos for internal use only are not communications with the public. An abstract or summary or abstract of an Official Statement and form letters are considered advertising.
A new account may be opened by any of the following EXCEPT Minor Investment club Trust LLC
Minor
When opening a minor's account, the social security number to be used is that of the
Minor
Distributions from a CMO are made and taxed at which levels
Monthly Taxed at all levels
How often are dividends paid for bond and equity UITs
Monthly dividends.
A long standing client of your firm has just purchased $500,000 of Town X new general obligation bonds. In responding to this client's concerns regarding the potential loss of these funds, you might point that
Municipal securities broker-dealers and their associated persons may never guarantee a customer against a loss or tell the client that insurance is available to safeguard investors against investment losses.
What type of fund has a NAV of 10 and POP of 11
Mutual fund or closed end fund
POP
NAV+Sales Charge
Doess SIPC protect against market declines
NO
U.S. securities dealers are required to be members of which self-regulatory organization?
NYSE
Pre-filing period allows marketing
No its also called the quiet period
Are UITs actively managed and what fee is associated
No not actively managed but there is a trust operating expense charge, initial sales charge, and investment management fee
Does a closed end fund have 12b-1 fees
No only mutual funds
Rank yields for bond trading at premium Current Nominal YTC YTM
Nominal Current YTM YTC
What is the age limit for making contributions to an IRA?
None
If Margaret exchanges one mutual fund for another in her IRA, what is the tax consequence?
None IRA owners are free to buy, sell, exchange or trade assets within their accounts without current tax consequences.
What part of the basis portion of a gross distribution from a 529 plan is taxable?
None of the basis portion of a gross distribution from a 529 plan is taxable. Only the earnings portion is subject to income tax if the money is taken out for non-qualified expenses (e.g. not for education).
Are closed end funds bought and sold at the price next calculated?
Nope
Can FINRA imprison people?
Nope
How often do BDs send account statements?
Normally every month Only required to yearly
What happens to a buy stop order before the ex-date of a stock split?
Nothing Buy stop orders are entered above the current market price, and are not adjusted in the event of a forward stock split (or cash dividend). If the split had been a reverse split (e.g. 1:4) then all open orders are cancelled.
Who are insiders
Officers Directors Owners of 10% or more NOT random people who just worked for company
Which of these pairs of options of ABC Company are of the same series?
Options are in the same series when they have identical expiration dates and strike prices; typically, a pair of options (one put and one call) forms a series. Options are in the same class when they have the same issuer and are of the same type (puts or calls). For example, all Google puts are in the same class.
A confirmation shows that an order was unsolicited. This means that it was
Originated by the customer
Which of the following parties is not permitted to purchase an IPO?
PM of a mutual fund
Firm element
Part of continuing education for firm
What is a non qualified retirement account
Payroll deduction plan Employees can deduct portion of savings for retirement
Profit sharing contribution
Percentage of compensation for all eligible employees
Rights
Permits the owner to purchase a certain number of shares, or, frequently, a fractional share of new stock from the issuer at a specific price
Custodian
Person responsible for managing individuals account and making investment decisions for that person
when is notice/permission required for a registered rep borrowing from person x
Person x is a friend/business relationship client at the same firm
How are employee deferral 401(k)s taxed
Pre Tax
Red herring is what and when offerred
Preliminary prospectus Offerred during Road Show
What happens to a DNR order when a 2 for 1 stock split occurs
Price is halved
A broker-dealer that fills a customer purchase order from its inventory must include which TWO of the following items on the trade confirmation?
Principal Markup
Which of the following is true of both closed-end funds and mutual funds?
Professionally managed portfolio
In a short account, if the equity position in the account falls below 30%, a call for additional funds will be issued and must be satisfied
Promptly.
SEC Rule 145
Protects owners when shares are reclassified
An investor in a high tax bracket is seeking an investment opportunity that will generate income, but with as much protection from taxation as possible. Which of the following choices may be appropriate?
Puerto Rico bonds
An investor sees an endorsement on social media from a former patient in a medical facility claiming that a particular drug that was prescribed to them was responsible for the elimination of debilitating symptoms caused by an underlying medical condition. The individual recommends that everyone reading this post purchase shares of the company behind this life altering drug. This is example of a
Pump and Dump
What does commingling do?
Puts customer securities at risk
As part of Rule 144A, the SEC created another category of financially sophisticated investors known as
Qualified instituional buyers
Clearing member firms that have been assigned exercise notice by the OCC, assign to their customers in what manner? Random, FIFO, LIFO
Random or FIFO
Offering Memorandum for Registered Debt Reg D Pref Stock ADR
Reg D
How can a chinese company raise US capital for accredited investors
Reg D private placement
An insurance company's separate account is not directly managed by its investment managers. This separate account is
Registered as a unit investment trust under the Investment Company Act of 1940
All of the following are characteristics of limited partners in a limited partnership EXCEPT Limited liability Right to receive a shar of losses The right to bind the partnership into lefal contracts Passive role in mgmt partnership
Right to bind the partnership into legal contracts
When comparing rights and warrants, which of the following statements are TRUE? I. Rights are longer term than warrants II. Warrants are longer term than rights III. At issue, the exercise price of a right is lower than the market price of the underlying stock IV. At issue, the exercise price of a warrant is lower than the market price of the underlying stock
Rights are short term instruments that allow the holder to buy the stock at a price that is typically lower than the current market price of the stock. Warrants are long-term instruments. The exercise price of the stock is typically higher than the market price of the stock at the time the warrants are issued. Warrants have value only if the price of the stock appreciates.
Rights vs. Options
Rights holders must be existing stock holders
Yield spread is often viewed as a measurement of which of the following?
Risk premium for investing in a particular bond
What determines whether Pablo can make a Roth IRA contribution this year?
Roth IRA contributions are available only to taxpayers who work, earn compensation, and have income below a certain dollar amount.
How can a chinese company raise US capital for QIBs
Rule 144a
HOUSE MAINTENANCE REQUIREMENT
Rules of individual broker-dealers in securities with respect to a customer's MARGIN ACCOUNT. House maintenance requirements set levels of EQUITY that must be maintained to avoid a margin call or having collateral sold out. These levels are normally higher than maintenance levels required by the NASD and the NYSE.
who oversees FINRA
SEC
When Securities exchange act of 1934 is violated who can bring charges against violators?
SEC against Private investors private suits
Under Rule 145, to qualify as an "exchange offer" of securities, the new and old securities must have
Same issuer Company is trading new securities for old
With which of the following investment objectives is a variable annuity usually associated?
Saving for retirement
FINRA regulates who
Securities firms and employees
Keogh
Self employed plans
Naked Put
Selling puts
After an indibviudal opens a new account what must a broker dealer do?
Send copy of account documentation within 30 days Tell customer any changes must be made within 30 days
A municipal bond issue is structured whereby a portion of the issue is retired each year. This is an example of a
Serial Bond
What are money market funds
Short term debt products
options agreement
Signed within 15 days by customer
A broker-dealer that gives investment advice is excluded from the definition of an "investment adviser" so long as it receives no special compensation for such advice, and the advice is
Solely incidental
Speculation is a common investment objective of
Speculation may be an investment objective of a high-net-worth-investor, who will have the ability to sustain economic risks.
A cash dividend is declared by ABC, with an ex-dividend date of June 20. Which two of the following statements are TRUE? I. Outstanding options contracts will be adjusted by the OCC for the dividend II. Outstanding options contracts will not be adjusted by the OCC for the dividend III. Holders of call options must exercise the option before June 20 to receive the dividend IV. Holders of the call options will receive the dividend whether or not the contract is exercised
Stock dividends and splits result in adjustments to outstanding options contracts, which are made by the OCC. Contract adjustments for cash dividends are not made. Cash dividends are paid only to persons who own the stock as of the record date. In order to receive the dividend, holders of calls must exercise options prior to the ex-dividend date.
Stock rights
Stock rights give shareholders the right, but not the obligation, to maintain proportionate share ownership, rather than be diluted when new shares are issued.
In which form of registration is the broker-dealer identified as the nominal owner of the securities?
Street Name
Non-affiliates
Subject to holding period limitation Not volume limits
TANS
Tax Anticipation Notes, short term loans issued by municipalities and backed up by tax revenues
How are interest payments in traditional IRA taxed
Tax deferred until withdrawl
How are distributions of ABLE taxed
Tax free for qualified
How are GNMA securities taxed at state, federal and local levels
Taxed at all
Agreement Among Underwriters
Terms established for the syndicate
Regulatory Element
That portion of the securities industry's continuing education requirement that is administered in a 3 hour training session at a testing center. All RRs must complete a training session within 120 days of their second registration anniversary and every 3 years thereafter. RRs who fail to complete this requirement will have their registration deemed inactive
All of the following enforce MSRB Rules
The Federal Reserve Board Comptroller of the Currency Federal Deposit Insurance Corporation NOT MSRB
Reg T
The Federal Reserve Board regulation that governs customer cash accounts and the amount of credit that brokerage firms and dealers may extend to customers for the purchase of securities. According to Regulation T, you may borrow up to 50% of the purchase price of securities that can be purchased on margin. This is known as the initial margin.
The role of the specialist (Designated Market Maker) is most closely associated with which of the following markets?
The NYSE relies on specialists (also referred to as designated market makers) to match buyers and sellers. Market makers facilitate trades on the Nasdaq and OTCBB.
Which of the following statements are true regarding the OTC market? I
The OTC market is a decentralized market connecting to broker-dealers electronically. It is a negotiated market place where various market makers enter bids and asks and facilitates the trading of stock not listed on an exchange.
The RIA (Registered Investment Adviser) is most comparable to what other type of recognizable professional designation? CFP CPA Chartered Life Underwriter
The RIA is not a professional designation and generally may not be advertised or communicated to clients. This helps to avoid confusion with legitimate professional designations.
How does the trade deficit affect the dollar
The US is exporting more Which means people want more US goods They want more goods BECAUSE foreign currency isd stronger
What is a benefit of a dividend reinvestment plan?
The advantage of a dividend reinvestment plan is the ability to convert dividends into new shares of a mutual fund without paying an additional sales charge.
An investor purchases a $10,000 5% municipal bond. The trade settles regular way on March 13th. The bond pays interest on January 1 and July 1. How much accrued interest is added to the price the seller receives?
The amount of accrued interest for a municipal bond is calculated based on 360-day years. A $10,000 5% municipal bond pays $500 of interest each year. The number of days of interest is 72 (30 + 30 + 12), so the amount of interest is $500 x 72/360 or $100.
Most secondary market trading in fixed income instruments takes place in which market?
The bulk of it is traded in the over-the-counter (OTC) market.
When a municipal bond is sold, the amount of accrued interest
The calculation of accrued interest for municipal bonds is based on 360 day years and 30 day months. It is added to the price paid to the seller, and includes interest payable up to the settlement date only. Bonds that trade flat do not include accrued interest.
Credit quality of ETNs are based on
The credit quality of an exchange-traded note is based on the creditworthiness of the issuer, usually an investment bank that structures the note and sets its terms.
With regard to evaluating quantitative suitability, which of the following statements is TRUE?
The customer's financial ability to pay for a transaction is a key quantitative suitability factor.
Backing away
The failure of a market maker to fulfill its obligation to buy or sell the minimum amount for a bona fide quote
Under which of the following circumstances is borrowing money from a customer permitted by FINRA rules?
The firm has written supervisory procedures in place and the representative is borrowing from a family member
When is the ex dividend date
The first business day before the record date
What is ex-date (ex-dividend date)
The first date on which a security is traded that the buyer is not entitled to receive distributions previously declared.
The fraud provisions of the Securities Exchange Act of 1934 apply to which of the following?
The fraud provisions of the act of 1934 apply to all persons and for all types of securities. No person or transaction is ever exempt from the antifraud provisions of the Securities Act of 1934.
How much can a corporate insider sell
The greater of 1% outstanding shares or average weekly trading volume over past FOUR weeks
Interpositioning
The placing of a third party between a broker-dealer and its customer when filling a trade. This practice is prohibited unless it results in a better execution for the customer
A stock price is reduced by the amount of a dividend on the
The stock price is reduced on the morning of the ex-dividend date.
A copy machine technician has learned of a major product recall announcement that will have a significant impact on corporate profits while working at the site. He contacts several friends and tells them to dump their stock in this company. In this situation,
The technician is not an insider Violated fiduciary responsibility towards confidential info Guilty of misappropriation of information
An investor wishes to liquidate units held in a unit investment trust prior to its termination date. Which of the following statements is true?
The units will be redeemed by the trust
What is the age limit for making contributions to a Roth IRA brokerage account?
There is no limit
How are dividends interest and capital gains tax treated in the accumulation phase
They are reinvested without a current tax liability
Payout phase
This is the time during which the annuity is annuitized. The cash value is paid to the annuitant, either as a lump sum or as a stream of income over a period of time
When does the SEC require the lead underwriter of a public offering to publish a tombstone ad?
Tombstone ads are an important way investment bankers communicate terms of a public offering to the financial community and institutional investors, prior to the offering's effective date. However, they are not required and are not approved by the SEC. They are always at the option of the issuer or underwriter.
What does yield to maturity (YTM) measure in a bond, assuming the bond is held to its scheduled maturity?
Total Return
Financial Crimes Enforcement Network (FinCEN)
U.S. Treasury system in which Suspicious Activity Reports are sent to if a broker-dealer notices activity in accounts appearing suspicious or possibly related to fraud or money laundering activities.
What entity stands behind the deposit insurance offered by the Federal Deposit Insurance Corporation (FDIC)?
US Government
Exempt securities from 1933 act
US government secruities Non profits Munis Commercial paper and banks securities PIPEs Intrastate offerings
Pursuant to Regulation S-P, a broker-dealer must provide a privacy notice to a customer
Under Regulation S-P, a privacy notice must be sent to a customer prior to entering into an agreement to engage in business with that client.
A company is selling an additional issue of common stock. In this situation, all of the following persons are insiders EXCEPT Chief marketing Chief financial Lead underwriter Shareholder with 13%
Underwriter
American Depository Receipts (ADRs)
Used by non-U.S. companies to enable U.S. investors to purchase shares of the company's stock and to enable that stock to trade on a U.S. stock exchange.
Who are variable annuities best for
Variable annuities are most appropriate for individuals who have maximized their contribution to other plans they are funding, and wish to set aside additional funds for the future.
How are verbal vs. written complaints treated
Verbal complaints arent classified as complaints
What is the liquidity of a structured product like?
Very limited
Warrants vs Rights
Warrants have a longer time frame
Record date
When the investor must be on the books to receive the dividend When the company checks it records So if someone purchases a stock on the ex dividend date one day before the record date they wont be recorded as a buyer until after its checked
Final settlement of a municipal syndicate account must be completed
Within 30 calendar days
A trader quotes a corporate bond as "trading on a 6.7% basis". Which yield is the trader referring to?
YTM
Can brokers change house maintenance requirements or Reg T requirements?
Yes house No Reg T
Saving for the future is a primary investment goal for many people. Which of the following products may help an investor achieve this goal?
Zero coupon
accredited vs QIB
accredited is 1. 1 mil net worth or 200k income 2. married 1 mil net worth or 300k income 3. institutional with 5 mil 4. officers, partners, directors of issuer QIB 100mil+ institution 10mil+ BD
What does "and interest" mean
accrued interest is included in settlement price
Restricted and control securities under Rule 144 are
acquired in the open market or in a private placement
When do catch up contributions start for IRA
after 50
Non-deductible contributions to a Traditional IRA are made with
after tax dollars
sell stop order
an order for a brokerage firm to sell a stock when the price falls to a specified level
Banker's Acceptance
an order to a bank by a customer to pay a sum of money at a future date
12 b-1 fees
annual fees charged by a mutual fund to pay for marketing and distribution costs Service expenses
Under federal rules, who is eligible to set up a 529 savings plan and contribute to it?
any adult
How often must a customer who opens a margin account receive disclosure of the risks of trading in such an account?
at the opening of the account and once per calendar year thereafte
Tax deferred growth means
anything invested will not incur a current tax liability
Someone is 56 and had a roth ira for 3 years, withdrew funds for mortgage how is it taxed
as ordinary income Not penalites
Someone is 56 and had a roth ira for 6 years, withdrew funds for mortgage how is it taxed
as ordinary income Not penalites
Stop Orders
become market orders once they are triggered and therefore must be executed in their entirety.
When do identities of accounts need to be proven
before open
The Bank Secrecy Act
blueprint under which broker-dealers develop and implement anti-money laundering training to their personnel.
The wife of a customer who has an individual IRA account calls the broker-dealer to request that the account statements be held by the firm while the family is vacationing in Europe over the summer. In this situation the firm is permitted to
continue to mail the statements to the customer's home unless the husband makes the request.
10 retail and 5 institutional written communication means
correspondence
Broker-dealer Z has become insolvent, and SIPC has been notified. Customer claims for SIPC coverage will be based on the market value of eligible securities held with the firm as of the date
date of bankruptcy
mini-max offering
deal cancelled unless minimum is raised
How does bond trading take place
decentralized OTC
Investment Advisers Act of 1940
defines and regulates investment advisers
HUD
department of the U.S. government that governs policy pertaining to homeownership, community development, and access to affordable housing
placement (money laundering)
depositing illegal funds
options disclosure document
details risks involved in options trading Just provided provided at time or before the account is approved
What requires prior principal review for registered representatives
direct client emails
To be an accredited investor a person must meet what financial threshold(s)?
either networth or income
selling away
engaging in private Securities transactions without the employing BD knowledge and consent Need approval and written notification
Rule G-47
firms to disclose to customers in both primary and secondary market transactions all material information known about the security that is reasonably accessible to the market. The rule applies to both solicited and unsolicited transactions. Make a note that SMMPs are exempt from this rule.
Closed-end companies
fixed capitalization - traded like any other stock on an exchange
Primary Dealers
government securities dealers, operating out of private firms or commercial banks, with whom the Fed's open market desk trades
Ginnie Mae (GNMA)
guarantees investors timely payment of interest and repayment of principal on mortgage-backed securities backed by federally insured or guaranteed loans.
What causes an income level to be partially deductible
income level
passive income
income resulting from business activities in which you do not actively participate
Affiliates are the same as
insiders
An individual investor at a broker-dealer has assets over $50 million. Under FINRA rules, this individual is considered a(n)
institutional account
To sell fixed annuities, a professional must have
insurance license
Open-ended funds
investors can add or withdraw funds on a monthly or quarterly basis.
Transfer Agent
issues and redeems certificates. Ensures proper number of shares in a stock split Handles name changes, validates mutilated certificates. Distributes dividends, gains, and and shareholder reports to mutual fund investors.
After a company has met the listing standards of the NYSE and has started trading
it must continue to meet standards for maintaining its listing, which are typically less stringent than the original standards Companies that trade on the NYSE must meet standards for continued listing. These standards are somewhat less strict than those required for initial listing. A company cannot delist its stock without notification to the NYSE and approval from the SEC. The NYSE, however, can delist a company's stock if it determines it has not met listing standards, or if its continued listing is not in the best interest of shareholders. A company's share price cannot fall below $1 to maintain NYSE listing. NYSE listed companies must provide annual reports to shareholders. See
What happens at expiration of an in the money call
just receive intrinsic value
Warrants
long-term options to buy a stated number of shares of common stock at a specified price
FOMC short term does what
make credit more or less available
A willful attempt by a broker/dealer to support the price of a security by interfering with fair market operations, is referred to as
market manipulation
What is another name for interest rate risk
market risk
The North American Securities Administrators Association (NASAA)
membership organization for state securities administrators. protect investors from fraud and abuse in the securities markets.
How much money and how many investors can a private placement have
no limit for both
Can you short sell a open ended or closed end fund
no open yes closed
Someone is 66 and had a roth ira for 6 years, withdrew funds for mortgage how is it taxed
not
ABLE account pre or post tax
post tax
Are non-qualified variable annuities pre or post tax
post tax dollars
Regulation M
prevent market manipulation during the offering process of a security
Your firm has just received a complaint sent via email from a long standing client. This complaint must be forwarded to a principal how quickly
promptly
ad valorem tax
property taxes backing GO bonds
Standby commitment
proportionate shares
When compared to ownership rights of common stock, owners of preferred stock generally
receive higher dividends
What happens at expiration of an out of the money put
receive intrinsic value
What does Sallie Mae do
securitizes student loans
The agreement that specifies rules for the group of financial institutions who assist an underwriter in the sale of a new securities issue but do not have responsibility for any unsold securities is a(n)
selected dealer agreement
not held order
selecting the price and/or time
sep ira
self-employed and small business employee
Selling group
sell allotment of newly issued securities
closing sale
selling call or put
opening sale
selling call or put
Investment company financial statements are sent to shareholders
semiannually
SIMPLE PLAN
small employer (no more than 100 employees)
An investment newsletter publisher is required to register as an investment adviser if it publishes
specific recommendations
1035 exchange
tax free transfer of one annuity to another
When the assets of the separate account of an insurance company are managed by the insurance company's investment company,
the account is registered as an open-end investment company.
Authorized Stock
the amount of stock that a corporation is authorized to sell as indicated in its charter
In a repurchase agreement (repo), the interest amount is calculated as
the difference between the sale price and higher repurchase price.
Who should report suspicious activity
the firm
Accumulation Phase
the period of time by which the owner of the contract pays in to the annuity; a beneficiary must be named if the policy owner dies during the accumulation phase.
CE Inactive
the status of an individual who does not complete Regulatory Element within 120 days of the 2 year anniversary of registration. A person who is CE Inactive cannot engage in or receive compensation for the activities of a registered rep, other than trailing commissions for business conducted before the inactive period. (18-470)
XYZ stock is trading at 21.75. The XYZ April 20 put option has time value
time value
Marking the Open
trading at the open, or falsely reporting trades at the open, just to affect the stock's opening price
layering (money laundering)
transferring through complex financial transactions
What type of taxation is GNMA securities subject to
triple
Coverdell Education Savings Account: eligible beneficiary
under 18
ETN is what type of debt
unsecured corporate
Commercial paper is best characterized as a (n)
unsecured promissory note
selected dealer agreement
used between the underwriter or syndicate and selling group members. The selling group assists in the selling of new securities without financial responsibility for any of the unsold issue.
exercise of partnership democracy
voting right available to LPs
How many units do bond UITs issue
while bond UITs issue a fixed number of units during their IPO,
A registered rep has been out of the securities industry for 3 years. This person A) would need to re-take their top-off exam and complete continuing education on the 2nd anniversary of passing the top-off exam. B) must re-take the top-off exam within two years of returning to the securities industry. C) must re-take the SIE and top-off exam in order to return to the securities industry. D) is not required to take any exams in order to return to the securities industry, but must complete all continuing education requirements upon return to the industry.
would need to re-take their top-off exam and complete continuing education on the 2nd anniversary of passing the top-off exam.
According to MSRB rules, when determining a fair and reasonable price when acting as principal the most important factor is
yield should be comparable to the yield on similar securities. Similar securities are those that are comparable in terms of coupon rate, quality, maturity, and block size when available in the market.