QBANK QUESTIONS

When does a customer have to receive the OCC Options Disclosure Document?

Before accepting the customer's first order to trade options covered by the ODD

Which of the following is an improper activity under the Uniform Securities Act? A) An investment adviser charges a customer a fee for advice leading to the sale of a security, receives a commission on the sale, and discloses the amount of the commission to the customer. B) An investment adviser charges two customers two different fees for a similar service. C) A dealer charges commissions for securities it sells from its inventory and discloses the amount of the commission to the customer. D) An investment adviser collects a commission on the sale of insurance products that he recommended, disclosing that a commission would be earned.

C) A dealer charges commissions for securities it sells from its inventory and discloses the amount of the commission to the customer.

Which efficient market hypothesis suggests that an investor can achieve above-market returns by only utilizing insider information? A) Super-strong B) Weak C) Semi-strong D) Strong

C) Semi-strong

When discussing a stock exchange, a specialist is A) a floor broker on the New York Stock Exchange who only executes trades for other brokers in return for commissions B) an electronic brokerage concern that executes trades online and through specialized trading order executing services C) a trader who makes a market in OTC stocks and ADRs D) a member of the New York Stock Exchange who executes orders for other members and who also acts as a market maker charged with the responsibility of keeping an orderly market in designated stocks

D) a member of the New York Stock Exchange who executes orders for other members and who also acts as a market maker charged with the responsibility of keeping an orderly market in designated stocks

Last year, an investor had a $5,000 loss after netting all realized capital gains and losses. This year the investor has a $1,000 capital gain. After netting his gains and losses, what will be his tax situation this year?

He will offset $1,000 ordinary income this year.

What is the risk measure associated with the capital market line (CML)?

STANDARD DEVIATION

One of your clients currently holds a long position in DEF common stock. Which of the following types of orders is designed to offer the client protection against loss?

Sell stop

Your clients, a married couple, are trying to decide whether to open an account as joint tenants with right of survivorship or tenants by the entirety. You might point out to them that one of the differences to consider is that:

a JBE account requires the consent of both parties to make a trade.

The semi-strong form of efficient market hypothesis (EMH) asserts that

all public information is already reflected in security prices making fundamental analysis valueless.

The formula for computing the combined equity in a mixed margin account is

current market value of the long positions, plus the credit balance in the short account, minus the current market value of the short positions, minus the debit balance in the long account

Pegging

entering buy orders for the purpose of supporting a stock price

The semi-strong form of the efficient market hypothesis (EMH) asserts that stock prices

fully reflect all publicly-available information.

A nonqualified plan designed to provide additional retirement benefits limited to a select group of management or highly-compensated employees is called

supplemental executive retirement plan (SERP)

One of your clients has recently turned 72 and has questions about RMDs. The client has a traditional IRA, a rollover IRA, and 401(k) plans from two previous employers. When computing the RMDs,

the RMD from each IRA is computed and may be made from one or both of them the RMD from each 401(k) is computed and must be paid from that 401(k)

One measure of an investor's total return is called holding period return. The computation includes both income and appreciation and is used for both debt and equity securities. An investor's holding period return would be less than the bond's yield to maturity if

the coupons were reinvested at a rate below the yield to maturity