020118

The regular way ex-dividend date for cash dividends is the A)2nd business day preceding the settlement date B)2nd business day following the record date C)1st business day preceding the record date D)3rd business day preceding the record date

1st business day preceding the record date

Your client has entered a limit order to buy 600 shares of DMF at $50 per share. DMF declares a 10% stock dividend. How would this order be adjusted on the ex-date? A)600 shares at $50. B)660 shares at $46.37. C)600 shares at $45.45. D)660 shares at $46.50.

50/1.10=45.45 600 at 45.45 The amount of shares is not adjusted unless it is is a full round lot

A customer buys a real estate limited partnership interest by contributing $20,000 and signing a nonrecourse note for $50,000. The customer's beginning basis is: A)20,000. B)50,000. C)70,000. D)30,000.

50k+20k=70k In real estate limited partnerships you add the nonrecourse note and original contribution

An investor buys 6 DFI Feb 60 calls at 2.25 each. At the time of the purchase, DFI is trading at 59.50 per share. What price would DFI stock need to reach for the investor to break even? A)62.25. B)61.75. C)60. D)57.75.

60+25=62.25 The break even on a long call is the strike+premium

Which of the following is a third-market trade? A)10,000 shares of LMNO, a stock listed on Nasdaq, are traded between two financial institutions via an electronic communications network (ECN). B)12,000 shares of XYZ, a stock listed on the New York Stock Exchange, are sold over the counter. C)12,000 shares of PQ, a stock listed on the Philadelphia Stock Exchange are sold on the Chicago Stock Exchange floor. D)10,000 shares of XYZ, a stock listed on the New York Stock Exchange, are sold on the Chicago Stock Exchange floor.

B)12,000 shares of XYZ, a stock listed on the New York Stock Exchange, are sold over the counter. A third market trade happens when a listed secuirity is sold over the counter

A client writes 1 Apr 30 call and buys 1 Apr 40 call. This is a: bull spread. bear spread. debit spread. credit spread.

Bear spread and credit spread This is a call credit spread, and bears sell calls. The 30 call is worth more because it has a lower strike price. Long the lower is bullish; short the lower is bearish.

The placement ratio, as shown in the "Bond Buyer", is: A)bonds issued/bonds unsold. B)bonds sold/bonds unsold. C)bonds sold/bonds issued. D)bonds issued/bonds sold.

Bonds sold/bonds issued

Of the following system characteristics which can be associated with TRACE (Trade Reporting and Compliance Engine)? Both sides of the transaction must report. Only the buyer is required to report. Money market securities are excluded from the reporting system. It is an execution and trade reporting system.

Both sides of the transaction must report Money market securities are excluded from the reporting system

Your firm is doing interviews of the top candidates from among those who responded to a recruiting advertisement. FINRA communications with the public rules for recruitment advertisements require that A)at least 2 positions be offered to successful candidates, so that they may make a choice B)both the job opportunity and the industry itself be represented honestly C)the broker dealer's name be clearly shown in the advertisement D)the successful candidate be promised that she will hold the position for at least one year after being hired

Both the job opportunity and the industry itself be represented honestly

The market attitude of an investor with no other position who writes an at-the-money put is: A)bullish. B)bullish/neutral. C)bearish/neutral. D)bearish.

Bullish/Neutral Writers of puts are bullish. However, an investor who writes an at-the-money put profits even if the market price of the stock does not move (neutral) because the option will expire worthless. The customer also profits if the stock rises out-of-the-money.

An investor holding a broad based diversified portfolio of stocks feels the market, which has slowed recently, may be poised for a brief fall before it continues an upward trend long-term. The investor does not want to incur the cost of selling a portion of their holdings nor the risk of mistiming the market. A possible strategy would be to: A)buy an index call option. B)buy an index put option. C)sell an index call option. D)sell an index put option.

Buy an index put option By not liquidating the client can benefit if the market increases. Because the portfolio is broad based and diversified, it should move with the market. An index option also moves with the market, and therefore, would be a good hedge vehicle. A long put should be used because it will increase in value if the market should decline.

Which of the following statements regarding qualified retirement plans are TRUE? Contributions are made with pretax dollars. Contributions are made with after-tax dollars. Distributions are 100% taxable. Distributions are taxable only to the extent of earnings.

Contributions are made with pretax dollars and distributions are 100% taxable

When a customer wants to open a guardian account, which of the following is needed? A)Full power of attorney. B)Copy of the court-ordered guardianship papers. C)Limited power of attorney. D)Signed customer account card, credit agreement, and loan consent.

Copy of the court ordered guardianship papers

From first to last, in what order would claimants receive payment in the event of bankruptcy? Holders of secured debt. Holders of subordinated debentures. General creditors. Preferred stockholders.

Holders of secured debt General creditors Holders of subordinated debentures preferred stockholders

Under SEC rules, a customer short sale on an exchange floor can be executed on which of the following? Plus tick. Zero-plus tick. Minus tick. Zero-minus tick.

I, II,III, and IV On the exchange floor, a short sell can happen anytime in the trade sequence.

Which of the following statements regarding a municipal variable rate demand obligation are TRUE? Interest payments are tied to the movements of another specified interest rate. Interest payments are tied to the movements of an underlying stock or index. the coupon rate stays the same for the life of the demand obligation and the price fluctuates. the coupon rate of the bond changes and the price remains stable.

Interest payments are tied to the movements of another specified interest rate the coupon rate of the bond changes and price remains stable

An inverted yield curve is the result of: A)investors moving from equities to debt instruments. B)investors buying long-term bonds and selling short-term bonds. C)investors moving from debt instruments to equity instruments.

Investors buying long term bonds and selling short term bonds

Which of the following are TRUE of an official statement? It is required by the SEC for all new issues. It is required by the MSRB for all new issues. It is required to be delivered to purchasers at or before settlement. It is generally used by underwriters to help sell the issue.

It is required to be delivered to purchasers at or before settlement It is generally used by underwriters to help sell the issue

All of the following are TRUE of the limit up/limit down rule EXCEPT A)the mechanism employs trading pauses or halts for prolonged price movements B)price band parameters are the same from the opening through the close of the trading day C)it is a rule designed to address severe and sudden price movements D)it utilizes specified price bands which prevent trades in stocks from occurring outside of those bands

It utilizes the specified price bands which prevents trades in stocks from occurring outside of those bands

Which of the following would protect a short May 50 put? A)Long April 55 put. B)Long April 45 put. C)Long June 55 put. D)Long June 45 put.

Long June 55 put

Which of the following are excluded from the Trade Reporting and Compliance Engine (TRACE) reporting requirements? A)Asset Backed Securities (ABSs) B)Collateralized mortgage obligations (CMOs) C)Money market securities D)Government agency bonds

Money market securities

Regular way settlement for U.S. government bonds is: A)two business days. B)next business day. C)same day. D)three business days.

Next business day

Proponents of which of the following technical theories assume that small investors are usually wrong? A)Volume of trading. B)Breadth of market. C)Odd lot. D)Short interest.

Odd lot theory Odd lots are usually traded by small investors; some analysts believe small investors are generally wrong.

Which of the following exemption provisions of the Act of 1933 may NOT be used for an initial offering of securities? A)Regulation D. B)Regulation A. C)Rule 144. D)Rule 147.

Rule 144 Rule 144 does not apply to intial offerings only secondary

New issues of municipal bonds are exempt from each of the following EXCEPT: A)Securities Act of 1933 registration requirements. B)U.S.A. state registration requirements. C)Securities and Futures Authority (SFA) requirements. D)Securities Exchange Act of 1934 antifraud provisions.

Securities Exchange act of 1934 anti fraud provisions Municipal securities are exempt from federal and state registration. However, no security is exempt from the antifraud provisions of federal securities law, including the 1934 Act. The Securities and Futures Authority is a UK regulator and has no application in the United States.

A customer, long 100 shares of QRS at 62.50, writes 1 QRS Sep 65 call at 1.50. If the call is exercised, which two statements are TRUE? The gain is $250. The gain is $400. For tax purposes, cost basis per share is 62.50. For tax purposes, cost basis per share is 61.

The Gain is 400 -6250+150+6500=400 Cost basis per share is 62.50 If a cover call writer is exercised the cost basis is the purchase price of the stock

If a bond is sold to a customer at par, under MSRB rules, all of the following must be disclosed to the customer on his confirmation EXCEPT A)yield based on price B)information on call features C)total monies due D)number of bonds purchased

Yield based on price A bond sold at par doesn't have a yield to maturity because its already at par

A municipal bond is offered at a discount. It has a 30-year maturity and is callable in 20 years at par. It is callable in 5 years at a premium and is puttable in 10 years at par. Which of the following yields would be quoted on this basis? A)Yield to the 30-year maturity. B)Yield to the 10-year put at par. C)Yield to the 5-year call at a premium. D)Yield to the 20-year call at par.

Yield to the 30 year maturity Bonds that sell at a discount are always quoted as yield-to-maturity. This is the lowest possible net yield that the investor would make by holding the bonds until the issuer redeems them.

If three individuals open up a joint account with your firm, and one of the parties to the account possesses written authorization from the other parties granting him authority to make all trading decisions, the new account form must contain information on: A)all three individuals. B)the individual granted trading authority. C)any two of the three individuals. D)the individual with the highest net worth.

You still need information on all three parties