Unit 2C

Which of the following statements regarding Treasury receipts are TRUE? 1. Interest is paid annually. 2. Interest is paid at maturity 3. They are sold at a discount. 4. They are sold at par.

2 & 3

Which of the following is NOT a type of real estate direct participation program? A.) Income B.) Existing properties 3.) Raw land 4.) New construction

A.) Income Direct participation real estate programs come in 3 types: raw land, new construction, and existing properties. Income is a type of oil and gas program.

The market forces that typically drive the price of a bond trading in the secondary market would include all of the following EXCEPT A.) the price of the issuer's stock B.) supply or availability of the bond C.) investors' demand for the bond D.) interest rates

A.) the price of the issuer's stock

An investor makes several statements regarding what they know about exchange-traded funds. All of them are correct EXCEPT A.) I can expect them to have lower expense and operating costs than mutual funds B.) I won't have to pay any sales charges as I do with mutual funds, but I will have to pay commissions C.) I can't buy them on margin because they represent an entire basket of stocks like mutual funds do D.) I'll be able to buy or sell them throughout the trading day like stocks trading on an exchange

C.) I can't buy them on margin because they represent an entire basket of stocks like mutual funds do

If an officer of a bank with the authority to purchase and sell securities on behalf of the bank wants to purchase new issues, which of the following statements is TRUE?

C.) The officer may not purchase a new issue because he is considered a restricted person. Under the rules regarding the purchase of new issues, bank officers would generally be characterized as restricted persons. They may not, therefore, purchase new issues.

A corporation that has issued cumulative preferred stock

pays past and current preferred dividends before paying dividends on common stock

Which of the following expressions describes the current yield of a bond?

D) Annual interest (coupon) payment divided by current market price

An example of securities that are established by states to provide other government entities such as cities, towns, school districts or state agencies with a short-term investment vehicle to invest funds include

D) Local Government Investment Pools

All of the following would be considered advantages of exchange traded funds as opposed to mutual funds EXCEPT A.) ETFs are priced continuously throughout the trading day B.) ETFs are marginable C.) ETFs trade on exchanges D.) ETFs are commissionable

D.) ETFs are commissionable

A shareholder feels strongly about some of the issues to be voted on at the next shareholder meeting but is unable to attend. Which of the following is TRUE?

The shareholder can vote by proxy.

. Once a dividend is initially declared by the board of directors, any future dividend payments

carry no guarantee of payment in any amount

Restricted securities may not be sold until they have been held fully paid for

6 months

The ability to take the proceeds from the redemption of one security or investment and allocate those proceeds in such a way so as to maintain the same level of return is expressed in which of the following concepts?

Reinvestment risk

When an issuer schedules portions of a bond issue's principal to mature at predetermined intervals over a period of years until the entire balance has been repaid, the issuer has issued what type of bond?

Serial

Regarding municipal general obligation (GO) bonds, which of the following is TRUE?

The lower the statutory debt limit, the safer for bondholders

An investor has purchased bonds having a put feature attached. With this put feature, it is likely that these bonds were issued with

a lower coupon than similar bonds without the feature

Treasury note (T-note) interest is stated as

a percentage of par value

Limited partnerships sold through private placements involve

a small group of investors, each contributing a large sum

All of the following could be characterized as benefits to owning common stock EXCEPT A.) limited liability B.) low dissolution priority C.) income potential via the receipt of dividends D.) capital gains via increases in share price

low dissolution priority

. An investor owns a bond carrying a 4% coupon. Interest rates in the marketplace have been moving downward and are currently at 2.5%. Given the current interest rates in the marketplace, this investor should see

the price of the bond move higher