Series 6
An investor open an account with BNZ Government Securities, a broker-dealer limiting its transactions exclusively to securities issued by the U.S. government. The account holds $250,000 of Treasury bonds, $250,000 of Treasury notes, and $50,000 in cash. If BNZ's broker dealer business should fail, the investor will receive SIPC protection in the amount of
$0.00
Certain investors are deemed "accredited" when they have a net worth of
$1 million not including net equity in the primary residence
Which of the following is added to M2 to arrive at M3?
$100.000 and larger time deposits
The FDIC provides insurance guaranteeing the safety of a depositor's accounts in FDIC member banks for each deposit up to
$250,000
Anyone who, as part of their business, gives investment advice for compensation must register as a(n)
Investment adviser under the Investment Advisers Act of 1940
For the Depository Trust & Clearing Corporation (DTCC), all of the following are true EXCEPT
It acts as a retail bank servicing savings and checking accounts
Which of the following statements regarding the third market is TRUE?
It is composed of listed securities traded OTC.
When a government actively manipulates the economy through tax and spending policies, this referred to as
Keynesian economics
Which of the following regulatory authorities relies exclusively upon other examining authorities to enforce its rules?
MSRB
corespondent firms would be likely to have relationships with which of the following types of broker-dealers
Market maker
which of the following pairs are NOT covered by the federal deposit corporation (FDIC) at any level?
Mutual funds and annuities
A major distinction of a secondary offering is
Proceeds are not received by the issuer of the securities
Which of the following actions of the Federal Reserve Board (FRB) would likely have the effect of causing interest rates to increase?
Raising the reserve requirements Raising the discount rate
A registered securities broker-dealer that does not comply with FINRA and SEC rules and regulations is subject to each of the following sanctions (Limits on activities, functions, or operations, Censure, Partial or full suspension of its registration.) EXCEPT
Reductions in SIPC coverage.
All of the following are benefits of using a prime broker (cost savings, multiple executing brokers, consolidation of records)
Research
Which of the following would be a leading economic indicator?
S&P 500 Index
All of the following are self-regulatory organizations (SROs) FINRA, MSRB, NYSE, CBOE) EXCEPT
SEC
which of the following companies was created by an act of congress and provide security investors limited financial coverage in the event that the investors servicing broker-dealer fails financially?
SIPC
Carrying firms, those that carry customer accounts, must
Segregate customer funds and securities from the firms' funds and securities.
Correspondent firms would be likely to have relationships with which of the following types of broker-dealers?
Self-clearing
An economic environment with little or no economic growth, but where inflation is present, is best described as
Stagflation
All of the following would be considered a defensive industry security (tobacco stock, food chain stock, utility company stock) EXCEPT
Steel Company Stock
Additional public offerings (APOs) of listed securities do not required delivery of a prospectus.
TRUE
The access equals delivery rule is not applicable to the preliminary prospectus.
TRUE
The final prospectus may be delivered via the internet before a sale.
TRUE
The Uniform Securities Act (USA) is the template from which state securities laws are derived. Under the USA, a BD would have to register with the state under all of the following conditions (there was an office in the state, calls were directed to prospects in the state, calls were received from clients in the state) EXCEPT
The BD made a market in municipal bonds issued by the state
Determining monetary policy and taking actions to implement those policies is the responsibility of
The Federal Reserve Board (FRB)
If an investment company bought stock directly from a bank, bypassing any intermediary or broker, this trade took place in
The Fourth Market
Under the securities Act of 1933, a corporation may qualify for an exemption from the registration statement and prospectus requirements under all of the following exclusionary provisions (Regulation A+, Regulation D, Rule 147) EXCEPT
The Investment Advisers Act
What federal law regulates the initial sale of securities to the public?
The Securities Act of 1933
A nonprofit organization requiring members to pay assessments into a general insurance fund used to meet customer claims in the event of a BD bankruptcy is
The Security Investor Protection Corporation (SIPC)
A customer believes that a security was misrepresented to them in a deceptive manner. They subsequently invest and lost money. The statue of limitation for bring action in this situation is the earlier of:
Two years of discovery of the event. Five years from the event.
A company that offers sales of another company's securities would BEST be described as a(n)
Underwriter
How many primary offerings can a corporation issue?
Unlimited
An individual or institution willing to hold securities positions in its own proprietary account for the purpose of providing liquidity to the marketplace is
a market maker
When a firm engages in proprietary trading, buying into and selling out of its own inventory for profit, it is acting as
a market maker
A firm designated as self-clearing can
Act in a back-office capacity for an introducing firm. Clear and settle transactions executed by other firms.
The transfer agent for a corporation is responsible for each of the following EXCEPT
Acting as an intermediary between the buy and sell sides of a transaction
Broker-dealers must comply with SEC rules and regulations when conducting business. A broker-dealer that does not comply may be subject to all of the following (censure, suspension or revocation of its registration, fines) EXCEPT
a prison sentence for principals of the firm ranging from 2 to 5 years
Economic data shows that the gross domestic product (GDP) has been declining steadily over the past two quarters. This would suggest
a recession
An entity such as a corporation wishing to offer securities for sale to the public for the purpose of raising capital is
an issuer
Your broker-dealer, rather than clear its own securities transactions, chooses, to introduce its business to another firm that will clear, processes and handle all back-office operations for it. The firm receiving the business is known as
carrying firm
A broker-dealer that executes trades and settles transactions for another broker dealer is called a
introducing firm
A fully disclosed BD
is an introducing firm clearing its transactions through a carrying firm
The Magnolia Steel Corporation needs to build a refinery plant. It is estimated to cost $750 million to complete. What market can be used to raise the money needed to build the new plant?
Capital Market
Your broker-dealer executes trades for other broker-dealers and after execution settles those transactions for them. Your firm would be classified as which of the following?
Carrying firm
Your BD acts as a prime broker for an institutional account. In this arrangement, your BD is likely to be providing which of the following services?
Clearing and transaction settlement services for executing brokers
A broker-dealer that accepts the risk of holding a particular security in its account to facilitate trading and provide liquidity in the security is BEST described as a(n)
Clearing corporation
An issuer wishing to raise additional capital engages the services of an underwriter who proposes limiting the sale to the 6 New England states. In doing so, it is most likely that the registration method to be used will be
Coordination
all of the following are acceptable choices to function as a depository and intermediary for transactions between buyers and securities (the Depository trust company, the national security clearing corporation, carrying firms) EXCEPT
Credit unions
A market maker
trades in a proprietary account to facilitate trading of a security and provide liquidity
An intermediary between the buy and sell sides of a transaction is known as
A Clearing Agent
A broker-dealer that accepts funds and securities from customers and its correspondent member firms would most likely be which of the following?
A carrying firm
A firm that functions for the purpose of receiving and delivering payments and securities on behalf of both buyer and seller in a securities transactions is
A clearing agent
A broker-dealer has a line of business restricted solely to the purchase and sale of securities with trade executions being handled by another member firm. Which of the following would best describe this type of firm?
Introducing/fully disclosed
The FDIC protects which of the following?
Broker-dealer clients
Assuming all other factors to remain constant, an increase in imports would most likely cause GPD to
Decrease
Which state of the business cycle is characterized by rising interest rates and higher wages?
Expansion
Once the SEC approves a registration, the cooling-off period ends and an effective date is established.
FALSE
All of the following SROs function under the SEC's oversight (FSLIC, CBOE, MSRB.) EXCEPT
FINRA
Which of the following is an SRO?
FINRA
Which regulatory body oversees trading in the over-the-counter (OTC) market?
FINRA
A shelf registration is good for 5 years.
False
It is generally agreed that the two primary policies impacting the U.S. economy are fiscal and monetary. Which of the following would be considered tools of fiscal policy?
Government Spending and Taxation
a customer has a significant amount of money in bank deposit accounts: $225,00 in a savings account titled in the customers name; $240,000 in a checking account titled jointly with a spouse; and $100,000 in an account where the customer is custodian of a grandchild. Should the bank fail, the Federal Deposit Insurance Corporation (FDIC) insurance will cover.
The entire $565,000
When securities are sold to the investing public in what are known as issuer transactions, the transactions are being done in
The primary market
A tombstone advertisement includes all of the following information (The offering Price, The name of the issuer, The number of shares to be sold) EXCEPT
The risks associated with the offering
An investor enters an order to purchase shares of XYZ stock. Another investor enters an order to sell XYZ stock. These two orders meet on the floor of a U.S. stock exchange where they are executed. This transaction took place in
The secondary market
The Federal Regulatory body that governs the securities industry is
The securities and Exchange Commission (SEC)
A broker-dealer that accepts the risk of holding a particular security in its account to facilitate trading and provide liquidity in that security is Best described as a(n)
market maker
A person who looks to provide advice to a city government concerning the issuance of municipal debt securities would BEST be describe as a(n)
municipal securities representative
An individual who purchases securities for a personal account is called a(n)
retail investor
