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Annie Stc Quiz Part 1

256 Questions  I  By Annchong71
annie stc quiz part 1
Private quiz for Annie covering Chap 1 to Chap 5.

  
Changes are done, please start the quiz.


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1.  A customer sells 100 shares of GM short. GM declares a 5% stock dividend. When the customer covers the short position, the customer will have to deliver:
A.
B.
C.
D.
2.  A registered representative is preparing to leave her firm. Her clients will be assigned to another representative at the same firm. To accomplish this:
A.
B.
C.
D.
3.  All of the following would normally be a characteristic of a growth company EXCEPT that it has a:
A.
B.
C.
D.
4.  A company declares a cash dividend. Standard and Poor's details this information in its dividend book. Ten days after the record date this information is published in a local newspaper. When is the ex-dividend date?
A.
B.
C.
D.
5.  A common shareholder has all of the following rights EXCEPT the right to:
A.
B.
C.
D.
6.  A registered representative wants to open a new account for a client who is a resident of Mexico. Which two of the following statements are correct?
  1. Customer verification of the client's personal information is not required if the customer was referred by an existing client.
  2. Customer verification of the client's personal information is required under any circumstances.
  3. The client can have either a taxpayer identification number or a passport number and country of origin.
  4. The client must have a taxpayer identification number to open the account.
A.
B.
C.
D.
7.  To apply for a securities license, a previously unregistered individual must:
  1. Complete Form U5
  2. Complete Form U4
  3. File the necessary form with FINRA
  4. File the necessary form with the SEC
A.
B.
C.
D.
8.  Concerning arbitration, all of the following are TRUE EXCEPT:
A.
B.
C.
D.
9.  A customer does not have a discretionary account with his brokerage firm. The firm may decide which of the following factors for the customer?
A.
B.
C.
D.
10.  All of the following are TRUE regarding the Uniform Gifts to Minors Act EXCEPT:
A.
B.
C.
D.
11.  An investor owns 4,000 shares of common stock which pays a quarterly dividend of 35 cents. If the investor purchases 500 additional shares prior to the first ex-dividend date of the year, what is the investor's expected annual income from the investment?
A.
B.
C.
D.
12.  Growth stocks would typically have which two of the following characteristics?
  1. High price-earnings ratios
  2. High dividend payout ratios
  3. Low price-earnings ratios
  4. Low dividend payout ratios
A.
B.
C.
D.
13.  When comparing long-term bonds to short-term bonds, all of the following are TRUE EXCEPT:
A.
B.
C.
D.
14.  Alabama Power 5 1/4s of '08 are listed in the bond table as having closed the previous day at 88 3/4. A buyer of 10 bonds at the close would have to pay:
A.
B.
C.
D.
15.  A corporation would primarily split its stock to:
A.
B.
C.
D.
16.  Which of the following could be found on a customer's confirmation?
  1. If the firm acted as principal
  2. If the firm acted as the customer's agent
  3. If the firm acted for a third party
  4. If the firm is a bona fide market maker in the security
A.
B.
C.
D.
17.  Which of the following are TRUE regarding the Code of Arbitration?
  1. Disputes between members must be submitted to arbitration.
  2. Arbitration decisions are binding and may not be appealed.
  3. A client cannot be forced to submit to arbitration.
  4. Arbitration is more cost-effective than litigating the matter in court.
A.
B.
C.
D.
18.  Which of the following would increase most in price if interest rates decline?
A.
B.
C.
D.
19.  ABC Corporation is paying a $5 yearly dividend on its preferred stock. The market price of the preferred stock is $80. The current yield is:
A.
B.
C.
D.
20.  One of your clients informs your firm that she will be traveling in Europe and would like your firm to hold all of her confirmations and statements. How long may your firm do this?
A.
B.
C.
D.
21.  A customer has $350,000 in securities and $150,000 in cash in his brokerage account. If the brokerage firm carrying the account was to go bankrupt, SIPC would cover:
A.
B.
C.
D.
22.  A registered representative wants to open a joint account for the dentists in his office building. Dr. White and Dr. Enamel will each contribute equally to the account but each dentist wants his portion of the account to pass to his own estate. Which two of the following are correct?
  1. The account should be established as Joint Tenants with Right of Survivorship
  2. The account should be established as Tenants in Common
  3. All dividends and capital gains in the account will be reported by the brokerage firm under one social security number
  4. All dividends and capital gains in the account will be reported by the brokerage firm on a percentage of ownership basis
A.
B.
C.
D.
23.  During periods of tight money, when the yield curve becomes inverted, the highest yield would probably be found in:
A.
B.
C.
D.
24.  A registered representative wants to open a joint account for the dentists in his office building. Dr. White and Dr. Enamel will each contribute equally to the account but each dentist wants his portion of the account to pass to his own estate. Which two of the following are correct?
  1. The account should be established as Joint Tenants with Right of Survivorship
  2. The account should be established as Tenants in Common
  3. All dividends and capital gains in the account will be reported by the brokerage firm under one social security number
  4. All dividends and capital gains in the account will be reported by the brokerage firm on a percentage of ownership basis
A.
B.
C.
D.
25.  Lazlo Toth, a registered representative with UAI Broker-Dealer, has a dispute with his firm over compensation. This dispute will be resolved by:
A.
B.
C.
D.
26.  Foremost Corporation has declared a quarterly dividend of 25 cents payable to stockholders of record on Friday, December 1st. An owner of Foremost Corporation who sold the stock on November 29th:
A.
B.
C.
D.
27.  All of the following are true regarding the role of a transfer agent EXCEPT that the transfer agent:
A.
B.
C.
D.
28.  Jim and his brother Ed have the following accounts at a brokerage firm: Jim's cash account with $175,000 in securities Ed's margin account with $150,000 in equity A cash account for Jim and Ed as JTWROS with $200,000 in securities If the brokerage firm were to go bankrupt, SIPC would provide:
A.
B.
C.
D.
29.  A company has a noncumulative preferred stock outstanding that pays a $5 dividend per year. If dividends on the preferred stock were not paid last year, but will be paid this year, how much should the preferred stockholder receive?
A.
B.
C.
D.
30.  An investor is interested in investing in a stock with growth potential. He instructs his broker to use the firm's research and buy $10,000 worth of a stock of the broker's choosing. Which of the following statements is correct?
A.
B.
C.
D.
31.  Of the different securities listed below, the one with the longest expiration date would normally be a:
A.
B.
C.
D.
32.  The number of custodians allowed for each minor under the Uniform Gifts to Minors Act may not be more than:
A.
B.
C.
D.
33.  A registered representative sells 1,500 shares of stock for a client and executes the transaction using the wrong account number. Which of the following actions should be taken?
A.
B.
C.
D.
34.  All of the following are true about a bond issue having serial maturities EXCEPT:
A.
B.
C.
D.
35.  A registered representative opens a joint options account for three brothers. According to the rules of the options exchanges, the registered representative would be required to obtain background and financial information from:
A.
B.
C.
D.
36.  A company based in Europe with offices also located in New Jersey would like to have its stock traded on the NYSE. This would most likely be accomplished through the issuance of:
A.
B.
C.
D.
37.  A registered representative enters an order for a client. In error, the RR purchases shares of the wrong security. Which of the following statements is TRUE?
A.
B.
C.
D.
38.  Upon learning of the death of a customer, a registered representative should do all of the following EXCEPT:
A.
B.
C.
D.
39.  Lyle, Molly, and Seena have a joint account registered as Tenants in Common. In the event that Seena dies, which of the following is true?
A.
B.
C.
D.
40.  Mr. Smith is associated with two other partners in an insurance partnership. He opens a cash account for the partnership. If Mr. Smith dies, what would the firm do as far as the partnership account is concerned?
A.
B.
C.
D.
41.  A registered representative receives an order from her customer to sell 600 shares of BWGF to be executed in her IRA account. The RR mistakenly executes the order in the wrong account. What action should be taken to correct the error?
A.
B.
C.
D.
42.  Which of the following are TRUE regarding account statements that are sent by member firms to customers?
  1. Active accounts get monthly statements.
  2. Active accounts get quarterly statements.
  3. Inactive accounts get monthly statements.
  4. Inactive accounts get quarterly statements.
A.
B.
C.
D.
43.  If a registered representative is opening an account for an investor, the registered representative would need to know all of the following information EXCEPT
A.
B.
C.
D.
44.  When comparing long-term bonds and short-term bonds, all of the following are true EXCEPT:
A.
B.
C.
D.
45.  If interest rates decline, which of the following securities would probably have the greatest increase in market value?
A.
B.
C.
D.
46.  A corporation has a 9% cumulative preferred stock issue outstanding. The company paid a $7 dividend in 2002 and $8 in 2003. If the company wants to pay a common stock dividend in 2004, the cumulative preferred stockholders must first receive a dividend of:
A.
B.
C.
D.
47.  According to SRO rules, which of the following must be obtained when an RR opens an account in which mutual fund shares will be purchased?
A.
B.
C.
D.
48.  A .05 change in basis would have the greatest effect on which of the following 6.00% coupon bonds?
A.
B.
C.
D.
49.  Which of the following would be characteristic of a call protection provision?
A.
B.
C.
D.
50.  An individual owns 100 shares of GHI stock. If GHI announces a 3 for 1 stock split, the individual:
  1. Will receive an additional stock certificate for 200 shares
  2. Must return his old stock certificate and will be issued a new certificate for 300 shares
  3. Will see the value of his investment in GHI stock increase due to the split
  4. Will not see any increase in the value of his investment in GHI stock due to the split
A.
B.
C.
D.
51.  XYZ Corporation uses the cumulative voting method of electing directors. A shareholder owning 100 shares of stock voting for the election of five new directors could vote:
A.
B.
C.
D.
52.  On Tuesday May 1st, XYX Corporation's Board of Directors announce a dividend payable on Friday, May 25th to stockholders of record on Monday, May 14th. The ex-dividend date would be:
A.
B.
C.
D.
53.  A registered representative wants to take on a second job working part-time as a waiter in a restaurant. This is allowed as long as the individual notifies:
A.
B.
C.
D.
54.  Which of the following statements is true regarding warrants?
A.
B.
C.
D.
55.  Persons who meet the definition of an investment adviser but are exempt from the registration requirements of the Investment Advisers Act of 1940 are:
A.
B.
C.
D.
56.  A husband and wife have a joint account with right of survivorship. If one of the parties places an order, the RR:
A.
B.
C.
D.
57.  In establishing a defensive portfolio, which of the following types of company stocks should not be included?
A.
B.
C.
D.
58.  A municipal bond issue with an inverted yield scale would have:
A.
B.
C.
D.
59.  Which two of the following are NOT SROs?
  1. MSRB
  2. SIPC
  3. FINRA
  4. SEC
A.
B.
C.
D.
60.  The following dividend information for New York Stock Exchange listed common stocks is reported in The Wall Street Journal.
Quarterly
Company Dividend Record Date Payable Date
Cummings Corp. 50 cents 4/10 5/15
Federal Corp. 85 cents 4/13 5/25
General Electric Corp. 95 cents 4/8 5/21
A buyer of Cummings Corporation on May 10th:
A.
B.
C.
D.
61.  A customer of a member firm goes on vacation and notifies the member firm in writing as to what should be done with his mail. All of the following are true EXCEPT:
A.
B.
C.
D.
62.  Which of the following would NOT be considered a joint account?
  1. Two unrelated individuals as tenants in common
  2. Husband and wife as tenants with rights of survivorship
  3. An investment club managed by an investment adviser
  4. A mother and her minor child in an account under the UGMA
A.
B.
C.
D.
63.  A municipality would refund a revenue bond issue for all of the following reasons EXCEPT to:
A.
B.
C.
D.
64.  A customer buys bonds with a $50,000 par value at 85 1/2. The bonds are callable at 110. If the customer holds the bonds to maturity he will receive:
A.
B.
C.
D.
65.  If a client's account is inactive, how often does a statement have to be mailed?
A.
B.
C.
D.
66.  Which of the following would be an invalid endorsement on a stock certificate?
A.
B.
C.
D.
67.  Which of the following statements is true regarding a registered rep who has not completed the regulatory element training within 120 days of his registration anniversary?
A.
B.
C.
D.
68.  An outstanding municipal bond would most likely be called when interest rates:
A.
B.
C.
D.
69.  Ashton purchased 100 shares of XYZ common stock in January 2003, at a price of $25 per share. XYZ pays a quarterly dividend of $.25 per share. Today, XYZ closed at $30 per share. What is the dividend yield of XYZ common stock?
A.
B.
C.
D.
70.  Dow Chemical bonds are listed in the NYSE bond table as having a nominal yield of 6.6% and having closed the previous day at 91 7/8. An owner of 10 bonds would receive a yearly interest payment of:
A.
B.
C.
D.
71.  A corporation wishes to open a cash account. Which of the following is required?
A.
B.
C.
D.
72.  Foremost Corporation has declared a quarterly dividend of 25 cents payable to stockholders of record on Friday, December 1st. The dividend would be paid to all stockholders whose name appeared on the record books of Foremost Corporation on:
A.
B.
C.
D.
73.  A registered representative who wishes to have outside employment must notify and receive permission from the:
A.
B.
C.
D.
74.  All of the following are TRUE regarding accounts established under the Uniform Gifts to Minors Act EXCEPT the:
A.
B.
C.
D.
75.  The Board of Directors of a corporation is responsible for establishing all of the following EXCEPT the:
A.
B.
C.
D.
76.  Under the know your customer rule, when a registered representative opens a new account for a customer, the registered representative should determine, among other things, the customer's:
  1. Financial condition and needs
  2. Objectives
  3. Ability to assume risk
A.
B.
C.
D.
77.  A corporation intends to raise additional funds from its existing shareholders rather than using the services of an underwriter. The corporation would be engaging in a:
A.
B.
C.
D.
78.  The quarterly dividend of ABC company is 32 1/2 cents. The market price is $24.00 a share. What is the current yield?
A.
B.
C.
D.
79.  Gavin, the captain of an ocean liner, just won $4,000,000 in a contest by hitting an eighty-two-foot basketball shot at the Smith and Wesson Longshot Sweepstakes. When his registered representative contacts him regarding these winnings, the rep should:
A.
B.
C.
D.
80.  Term bond quotes are based on:
A.
B.
C.
D.
81.  A customer gives a registered representative the following instructions: Buy 1,000 shares of General Electric "whenever you think the price is right." Under current regulations:
A.
B.
C.
D.
82.  Which of the following would be most suitable for a Non-Managed Fee-Based Account?
A.
B.
C.
D.
83.  If interest rates are expected to rise over a period of time, a municipality that must raise money would probably issue securities with:
A.
B.
C.
D.
84.   A bond is selling at a premium. This is indicative of all of the following EXCEPT:
A.
B.
C.
D.
85.  The City of Richmond, Virginia is issuing 8 1/4% general obligation bonds at 100% of their par value. The bonds will mature in 20 years. An investor purchasing a bond at its offering price and holding the bond for 20 years will receive a yield-to-maturity of:
A.
B.
C.
D.
86.  An account executive has limited discretion over a customer's account. The account executive can:
A.
B.
C.
D.
87.  From the issuer's perspective, when comparing term bonds and serial bonds, serial bonds have:
A.
B.
C.
D.
88.  Under what circumstances may a husband and wife both be custodians for a minor's account?
A.
B.
C.
D.
89.  XYZ corporation has 7,000,000 shares of common stock ($1 par value) authorized of which 5,000,000 shares have been issued. There are 500,000 shares of treasury stock. The current market price of XYZ is 20. The market capitalization of XYZ common stock is:
A.
B.
C.
D.
90.  An investor who has granted power of attorney to his son dies. The power of attorney:
A.
B.
C.
D.
91.  Mr. Jones, a shareholder of XYZ Corporation, reads in the newspaper that XYZ Corporation intends to issue new shares through a rights offering. The terms of the rights offering are as follows:
  1. 10 rights plus $10.50 are required to subscribe to one new share of stock
  2. Fractional shares become whole shares
  3. The record date is Friday, October 17th
  4. JPMorgan Chase and Bank of America are the transfer agents
  5. Goldman Sachs and Morgan Stanley are the standby underwriters
Mr. Jones would tender (submit) his rights to:
  1. JPMorgan Chase
  2. Bank of America
  3. Goldman Sachs
  4. Morgan Stanley
A.
B.
C.
D.
92.  The securities that are deposited in an escrow account for an advanced refunding are:
A.
B.
C.
D.
93.  Warrants would most likely be issued to:
A.
B.
C.
D.
94.  American Telephone Company of Ohio is offering $50,000,000 worth of 9% bonds at a price of 99.25% of par value. An investor buying the bonds would receive yearly interest of:
A.
B.
C.
D.
95.  A customer owns 50 shares of ABC Corporation. ABC Corporation is engaging in a rights offering. The terms of the offering are that 10 rights plus $35 is required to buy one new share of stock. If the customer wanted to subscribe to the rights offering, how many additional rights would he need to buy 100 shares of stock?
A.
B.
C.
D.
96.  A customer owns stock of a corporation that has declared a $1 dividend to holders of record Monday, December 22nd. If the customer wishes to sell the stock but still be entitled to the dividend, he should sell the stock on:
  1. Wednesday, December 17th, regular-way settlement
  2. Thursday, December 18th, regular-way settlement
  3. Monday, December 22nd, cash settlement
  4. Tuesday, December 23rd, cash settlement
A.
B.
C.
D.
97.  If the Federal Reserve Board increased the discount rate, you would expect:
A.
B.
C.
D.
98.  A client purchases $800,000 of stock in a margin account and deposits the Regulation T margin requirement. If the current value of the stock is $700,000 and the broker-dealer declares bankruptcy, SIPC would cover:
A.
B.
C.
D.
99.  ABC Corporation has issued two $1,000 par value bonds with the same coupon rate, one paying interest annually and the other paying interest semiannually. If both bonds are held to maturity in 10 years, the bond paying interest annually will have a total return that is:
A.
B.
C.
D.
100.  Briana Corporation, an existing public company, is offering 500,000 shares of common stock to the public through an underwriting syndicate. The prospectus states that 250,000 shares are being offered by selling stockholders and 250,000 shares are being offered by Briana Corporation. The effect of this offering will be:
  1. A dilution in the earnings per common share
  2. An increase inthe earnings per share
  3. The number of shares outstanding will increase by 500,000
  4. The number of shares outstanding will increase by 250,000
A.
B.
C.
D.
101.  A customer would like to open an account designated by number. The registered representative should:
A.
B.
C.
D.
102.  When comparing high-grade bonds to low-grade bonds, lower grade bonds will have:
  1. Higher yields
  2. Lower yields
  3. Higher market prices
  4. Lower market prices
A.
B.
C.
D.
103.  An investor sells ten 5% bonds and buys another 10 bonds with a 5 1/4% coupon rate. The investor's yearly cash flow from the bonds will have increased by:
A.
B.
C.
D.
104.  A husband and wife have a joint account. If the husband instructed his RR to sell securities and send a check, the check could be made payable to:
A.
B.
C.
D.
105.  Co. A Co. B Co. C Co. D
Earnings per Share $2.00 $6.50 $5.20 $7.80
Dividends $0.10 $2.50 $2.60 $6.00
Percentage ofRetained Earnings 95% 62% 50% 23%
Which of the above companies is probably a utility?
A.
B.
C.
D.
106.  SIPC is a(n):
A.
B.
C.
D.
107.  All of the following would be included on an option confirmation EXCEPT:
A.
B.
C.
D.
108.  If an investor is primarily seeking capital gains, when would be the best time to buy bonds?
A.
B.
C.
D.
109.  A corporation is contemplating the refunding of its debt issues. The refunding could accomplish which of the following?
  1. Reduce interest costs
  2. Change the maturity schedule of the corporation's debt
  3. Remove restrictive provisions from the indenture
A.
B.
C.
D.
110.  A client has a margin account with a long market value of $950,000 and a debit balance of $550,000. If the broker-dealer declares bankruptcy, which TWO of the following statements are TRUE?
  1. The client is permitted to pay $550,000 and receive $950,000 of securities.
  2. The client is permitted to pay $500,000 and receive $950,000 of securities.
  3. The client is covered for $400,000 of securities.
  4. The client is covered for $500,000 of securities.
A.
B.
C.
D.
111.  A Japanese company would like to have its stock traded in the U.S. securities markets. This would most likely be accomplished through the issuance of:
A.
B.
C.
D.
112.  Four municipal bonds have the same maturity date. Which of the following would cost an investor the greatest dollar amount when purchased?
A.
B.
C.
D.
113.  Municipal bond rating organizations are primarily concerned with the risk of:
A.
B.
C.
D.
114.  A NYSE-listed stock closed at $72. The next day the stock is ex-dividend 60 cents. To determine if the stock increased or decreased from the close of trading, the price would be based upon:
A.
B.
C.
D.
115.  A client would like to open a numbered account. An RR may open the account:
A.
B.
C.
D.
116.  A customer wants to open a cash account. All of the following are required on the new account form EXCEPT:
A.
B.
C.
D.
117.  The Securities Investors Protection Corporation (SIPC) insures all of the following accounts EXCEPT:
A.
B.
C.
D.
118.  Which of the following pertain to ADRs?
  1. They facilitate the trading of foreign securities in U.S. markets.
  2. They facilitate the trading of U.S. securities in foreign markets.
  3. They are receipts issued for foreign securities.
  4. They are receipts issued for U.S. securities.
A.
B.
C.
D.
119.  Advertisements regarding options:
  1. Must be submitted to the exchange 15 days prior to initial use
  2. Must be submitted to the exchange 10 days prior to initial use
  3. Must be kept on file by the member firm for six years
  4. Must be kept on file by the member firm for three years
A.
B.
C.
D.
120.  Which of the following persons cannot delegate power of attorney to a third party for the purpose of making securities transactions?
A.
B.
C.
D.
121.  On Monday August 3, the board of directors of XYZ Corporation issued a press release stating that at today's meeting, they had decided to pay a 25 cent quarterly dividend. The checks for the dividend are to be sent out on September 15. The checks will be made out to anyone who is recorded as a shareholder as of Friday, August 28. The first trading day on which purchasers of XYZ stock will not receive the dividend is Wednesday, August 26. Wednesday, August 26 is called the:
A.
B.
C.
D.
122.  The stock price of XYZ Corporation has remained stable despite the fact that the company has increased the amount of its dividend. Under these conditions, what would happen to the stock's current yield?
A.
B.
C.
D.
123.  An uncle is the custodian for a nephew's account. When the nephew reaches majority, the uncle:
A.
B.
C.
D.
124.  A company declares a forward stock split. What is the effect on the stock's par value?
A.
B.
C.
D.
125.  Which of the following would be a benefit of an account that is designated Transfer on Death (TOD)?
A.
B.
C.
D.
126.  A corporation's shareholders must vote for:
A.
B.
C.
D.
127.  Which of the following communications must be filed with FINRA ten days prior to use?
  1. Options advertising
  2. Mutual fund advertising
  3. CMO advertising
  4. Unit Investment Trust advertising
A.
B.
C.
D.
128.  The primary purpose of a self-regulatory organization (SRO) is to:
A.
B.
C.
D.
129.  If a broker-dealer should go bankrupt, the trustee appointed under the Securities Investor Protection Act is responsible for:
  1. Notifying the firm's customers that the firm is in the process of being liquidated
  2. Distribution of securities owned by customers that are held by the firm
  3. Seeing that the distribution of cash and securities are administered in an orderly manner
A.
B.
C.
D.
130.  Which of the following statements is TRUE concerning the responsibilities of a principal at a broker-dealer?
A.
B.
C.
D.
131.  A client's wife calls and wants to purchase 200 shares of XYZ in her husband's personal account. The registered representative handling the account knows that a favorable earnings report is about to be issued. The registered representative:
A.
B.
C.
D.
132.  Which of the following outside business activities would RRs NOT have to report to their employing broker-dealer?
A.
B.
C.
D.
133.  Relative to a custodian account, which of the following are TRUE?
  1. The minor is responsible for tax consequences.
  2. The custodian is responsible for tax consequences.
  3. Income generated in the account is taxed as it is received.
  4. Income generated in the account is taxed when the minor becomes an adult.
A.
B.
C.
D.
134.  A company has $50,000,000 par value convertible bonds outstanding. The coupon rate is 8%. The bonds are currently selling at 96. What is the current yield?
A.
B.
C.
D.
135.  Which of the following would be acceptable as a custodian on a UGMA account?
A.
B.
C.
D.
136.  Fully paid customer securities held at a brokerage firm:
A.
B.
C.
D.
137.  An announcement in The Wall Street Journal states that New York State plans an advanced refunding of its 7 1/2% Dormitory Bonds through the issuance of a special $50,000,000 bond issue. This means that:
A.
B.
C.
D.
138.  If SIPC does not cover a customer's account in a brokerage firm that has gone bankrupt, the investor would be a:
A.
B.
C.
D.
139.  Which of the following are needed to open a corporate margin account?
  1. Corporate charter and resolution
  2. New account form
  3. Hypothecation Agreement
  4. Trust Agreement
A.
B.
C.
D.
140.  SEC regulations state that a brokerage firm must provide a current financial statement (balance sheet) to:
A.
B.
C.
D.
141.  Which of the following events would generally require a shareholder vote?
  1. Declaration of a stock dividend
  2. Declaration of a stock split
  3. Declaration of a cash dividend
  4. Election of a director
A.
B.
C.
D.
142.  A tombstone ad states that the McGee Oil Company is offering $200,000,000 of 8 1/2% bonds due July 1, 2026 at 99 1/2% of their par value. The yield-to-maturity on the bond is:
A.
B.
C.
D.
143.  A registered representative receives a sell order from his customer. When he submits the order to the wire room he accidentally transposes two of the digits in the account number and the order is processed under the wrong account. This problem would be rectified:
A.
B.
C.
D.
144.  Which of the following companies would most likely pay a dividend in stock rather than cash?
A.
B.
C.
D.
145.  Prior employer permission would be required for a registered representative to give public:
  1. Speeches
  2. Seminars
  3. Lectures
A.
B.
C.
D.
146.  A Suspicious Activity Report (SAR) should be filed:
A.
B.
C.
D.
147.  When a stock splits 5 for 4, by what percentage will the price of the stock be reduced?
A.
B.
C.
D.
148.  A client would like all trade confirmations sent to his investment adviser. This will require:
A.
B.
C.
D.
149.  A customer contends that his registered representative made unauthorized trades in his account, and will take this matter to an arbitration panel. Regarding the makeup of this panel, which of the following statements is TRUE?
A.
B.
C.
D.
150.  When is the regulatory element of continuing education required to be completed by a registered rep?
  1. On the second anniversary of initial registration
  2. On the third anniversary of initial registration
  3. Every two years thereafter
  4. Every three years thereafter
A.
B.
C.
D.
151.  All of the following are true regarding discretionary accounts EXCEPT:
A.
B.
C.
D.
152.  All of the following are true about warrants EXCEPT:
A.
B.
C.
D.
153.  All of the following statements regarding the privacy notice of a broker dealer are true EXCEPT:
A.
B.
C.
D.
154.  The purpose of cumulative voting is to:
A.
B.
C.
D.
155.  Which TWO of the following must a principal approve prior to use?
  1. An advertisement concerning the appointment of new managing directors
  2. An advertisement promoting a new type of CMO
  3. An advertisement regarding covered call writing
  4. An e-mail from an RR to a client concerning a security in her account
A.
B.
C.
D.
156.  A customer purchases ten 7% $1,000 par value bonds selling at a discount that have a yield-to-maturity of 9%. The customer will receive a semiannual interest payment of:
A.
B.
C.
D.
157.  When a bond is selling at a premium:
A.
B.
C.
D.
158.  Two brothers open a joint account to trade options. Who will be required to sign the option agreement?
A.
B.
C.
D.
159.  All of the following are TRUE of treasury stock EXCEPT it:
A.
B.
C.
D.
160.  Which of the following would probably be most leveraged?
A.
B.
C.
D.
161.  A notice of sale appears showing that RFQ corporation is selling 800,000 units at $6 per unit. Each unit consists of 2 shares of pre-ferred stock and a warrant for 1/2 share of common stock. If all of the warrants are exercised, how many shares will be outstanding?
A.
B.
C.
D.
162.  When a gift of securities is purchased for a minor in a custodian account, the gift becomes the property of the minor:
A.
B.
C.
D.
163.  The purpose of a sinking fund is for redeeming a corporation's
A.
B.
C.
D.
164.  A notice is published stating that RMO 5% convertible preferred stock will be called at $60 per share. The preferred is convertible into 1/2 share of common and is selling in the market at $56 per share. RMO common stock is selling in the market at $110 per share. After the notice appears, the price of the preferred stock will most likely trade in the market at:
A.
B.
C.
D.
165.  Which of the following statements are TRUE concerning custodian accounts?
A.
B.
C.
D.
166.  Which of the following is TRUE regarding numbered accounts?
A.
B.
C.
D.
167.  XYZ Corporation has 2,000,000 shares of common stock authorized. The company has issued 1,000,000 common shares of which 200,000 shares are treasury stock. The company has earnings of $2.00 per share. The XYZ Corporation has repurchased:
A.
B.
C.
D.
168.  Which of the following risk factors are the most important for purchasers of long-term high-grade bonds?
A.
B.
C.
D.
169.  A corporation calls for redemption 1,000,000 shares of convertible preferred stock. The corporation announces that the convertible preferred will be redeemed at a price of $20 plus an accumulated dividend of 12 cents. Each share of preferred can be converted into 1/2 share of common. The preferred stock is selling at $19. There are 2,000,000 shares of common outstanding. Earnings for the common stock is $2.50 per share. The common stock is selling at 35.75. Which of the following alternatives would be least attractive to a preferred stockholder?
A.
B.
C.
D.
170.  Which of the following would most likely have a mandatory sinking fund?
A.
B.
C.
D.
171.  According to AML procedures, which two of the following is a member firm required to obtain when opening a new account for a non-U.S. citizen?
  1. Current employer
  2. Passport number and country of issuance
  3. Current address
  4. Telephone number
A.
B.
C.
D.
172.  An aunt wishes to give her niece some securities as a gift. The niece's parents have recently died and a court has appointed a guardian other than the aunt. The aunt:
A.
B.
C.
D.
173.  The current yield on a $1,000 par value 5% bond selling at $800 maturing in 10 years is:
A.
B.
C.
D.
174.  A customer wants safety and preservation of capital. He should purchase:
A.
B.
C.
D.
175.  Three bonds all have the same coupon rate of 6%. Bond A has a five-year maturity. Bond B has a one-year maturity. Bond C has a six-month maturity. If interest rates change, which bond would have the greatest dollar change in price?
A.
B.
C.
D.
176.  Exclusions from the definition of an investment adviser are given to which of the following?
A.
B.
C.
D.
177.  Mr. Jones requests that his securities be held in street name. To honor his request, the broker-dealer must:
A.
B.
C.
D.
178.  Supplemental documentation would be required when opening all of the following types of accounts EXCEPT:
A.
B.
C.
D.
179.  Which of the following are true about SIPC?
  1. It was created by an Act of Congress and is considered a U.S. government agency.
  2. It is a nonprofit organization that only broker-dealers may join.
  3. It provides insurance for customer accounts in the event of bankruptcy by a broker-dealer.
  4. It provides insurance for customer accounts for fraud, embezzlement, and counterfeiting.
A.
B.
C.
D.
180.  Which of the following would be considered advertising?
A.
B.
C.
D.
181.  Pennsylvania Power Company has announced it will refund $100 million of its outstanding 12% bonds that were to mature in 2020. The bonds will be refunded at 106.75% of par value from the proceeds of a $100 million refunding issue. The refunding issue has a 6% coupon rate and matures in 2012. The refunding will reduce all of the following EXCEPT the:
A.
B.
C.
D.
182.  A corporation wishes to open a cash account. Which of the following is required?
A.
B.
C.
D.
183.  A stock trades ex-dividend on Monday the 20th. What is the last day an investor can purchase the stock and be entitled to the dividend?
A.
B.
C.
D.
184.  To whom may a registered representative appeal a finding by a Hearing Panel?
A.
B.
C.
D.
185.  Arbitration decisions are:
A.
B.
C.
D.
186.  You are a registered representative servicing a joint tenants with rights of survivorship account for a married couple, Byron and Shelly Nelson. You also maintain an account for their adult son Frank. This morning you receive a phone call from Frank informing you that Byron has died. As part of helping his mother sort out the many details associated with his father's death, Frank requests that the assets in the account be transferred into an account in Shelly's name only. The first course of action would be to inform Frank that:
A.
B.
C.
D.
187.  A broker-dealer has failed because it has a net capital deficiency. Which of the following parties would NOT be covered by SIPC?
A.
B.
C.
D.
188.  To open an account and determine suitability for a new client who would like to invest in an exploratory drilling oil and gas direct participation program, the RR must obtain all of the following information EXCEPT the customer's:
A.
B.
C.
D.
189.  Which of the following would be considered a fiduciary?
  1. A trustee
  2. A guardian
  3. An administrator of an estate
  4. An executor of an estate
A.
B.
C.
D.
190.  Self-regulatory organizations generally have rules that:
  1. Mandate commission schedules that brokerage firms must charge
  2. Are designed to maintain a fair and orderly market
  3. Mandate all brokerage firms stand ready to buy or sell securities from their own account to maintain liquidity
  4. Require brokerage firms use reasonable diligence to provide customers with best execution
A.
B.
C.
D.
191.  An investor owns 280 shares of XYZ Corporation. XYZ Corporation pays a 15 cents quarterly dividend. XYZ Corporation announces a 5-for-4 split. The dividend per share is adjusted to reflect the split. How much will the investor receive in dividends each quarter after the split?
A.
B.
C.
D.
192.  Which of the following would have the least capital risk for a client?
A.
B.
C.
D.
193.  Which of the following best describes a wrap account?
A.
B.
C.
D.
194.  An employee of a member firm opens an option account with another member firm. Which of the following statements are true?
  1. The employee needs written permission from his employer prior to opening the account.
  2. Duplicate confirmations must be sent to his employer.
  3. The employee needs permission from his employer each time a trade is executed.
A.
B.
C.
D.
195.  All of the following are TRUE about discretionary accounts EXCEPT:
A.
B.
C.
D.
196.  Which of the following employees of a broker-dealer must provide written notification to his or her employer in order to open a securities account at another firm?
  1. A registered representative
  2. A principal
  3. A secretary
  4. A janitor
A.
B.
C.
D.
197.  Under industry rules the final approval to open a new account is given by a(n):
A.
B.
C.
D.
198.  Mrs. Smith buys a 6 3/4% municipal bond at 101 3/4. The yield-to-maturity on the bond is:
A.
B.
C.
D.
199.  A corporation calls for redemption 1,000,000 shares of convertible preferred stock. The corporation announces that the convertible preferred will be redeemed at a price of $20 plus an accumulated dividend of 12 cents. Each share of preferred can be converted into 1/2 share of common. The preferred stock is selling at $19. There are 2,000,000 shares of common outstanding. Earnings for the common stock is $2.50 per share. The common stock is selling at 35.75. If all shares were converted, how many shares of common stock would be outstanding?
A.
B.
C.
D.
200.  An investor owns $10,000 worth of XYZ Corporation convertible bonds callable at 102. Prior to the call the bonds are selling in the market at 103. If the corporation calls the bonds at the call price, the investor will receive:
A.
B.
C.
D.
201.  A customer sells short 400 shares and the company declares a 10% stock dividend. When the customer covers the short position, the customer will be required to deliver:
A.
B.
C.
D.
202.  ABC Corporation has a capitalization that consists of a large amount of debt securities relative to a small amount of equity securities. ABC Corporation would be considered to have a capitalization that is:
A.
B.
C.
D.
203.  Which of the following are TRUE when a corporation opens a cash account with a brokerage firm?
  1. A new account form must be completed.
  2. A corporate resolution must be filed with the brokerage firm.
  3. Stock purchases for the corporation must be registered in the corporation's name.
  4. Stock purchases for the corporation must be registered in the name of the president of the corporation.
A.
B.
C.
D.
204.  The market price of ABC Corporation common stock is $56. The yearly dividend is $3. The quarterly dividend is 75 cents. What is the current yield of the stock?
A.
B.
C.
D.
205.  Concerning Moody's ratings, which is the most speculative in the investment grade category?
A.
B.
C.
D.
206.  Why would a new account be designated TOD?
A.
B.
C.
D.
207.  A brokerage firm is holding $600,000 of securities for a customer. The securities are registered in the name of the customer. If the firm was being liquidated by SIPC, the customer would:
A.
B.
C.
D.
208.  A customer's margin account has a market value of $750,000 and a debit balance of $400,000. He also has a commodities account that has equity of $150,000. If the firm went bankrupt, SIPC would provide coverage to this customer for:
A.
B.
C.
D.
209.  An investor purchases a 4% bond at a premium and holds the bond to maturity. Which of the following could represent the yield to maturity on the bond?
A.
B.
C.
D.
210.  Relative to a municipal bond purchased at a discount, place the following in the proper sequence from lowest to highest.
  1. Current yield
  2. Nominal yield
  3. Yield-to-maturity
A.
B.
C.
D.
211.  A registered rep holding limited discretionary authority over a customer's account may:
A.
B.
C.
D.
212.  Mr. Jones, a shareholder of XYZ Corporation, reads in the newspaper that XYZ Corporation intends to issue new shares through a rights offering. The terms of the rights offering are as follows:
  1. 10 rights plus $10.50 are required to subscribe to one new share of stock
  2. Fractional shares become whole shares
  3. The record date is Friday, October 17th
  4. JPMorgan Chase and Bank of America are the transfer agents
  5. Goldman Sachs and Morgan Stanley are the standby underwriters
Mr. Jones chose to subscribe to the rights offering and purchased additional XYZ Corporation common stock on October 16th. Based on his latest stock purchase, he would:
A.
B.
C.
D.
213.  Which of the following could not be accomplished in a cash account?
A.
B.
C.
D.
214.  A 10% New York City GO bond matures in 20 years. The bond is callable in 8 years at 103. All of the following are true regarding this bond EXCEPT:
A.
B.
C.
D.
215.  Which of the following are types of joint accounts?
  1. UTMA
  2. Rights of survivorship
  3. Tenants in common
  4. Transfer on death
A.
B.
C.
D.
216.  An investment adviser opens an account for one of his clients. The registered representative opening the account would need all of the following EXCEPT:
A.
B.
C.
D.
217.  An uncle is a custodian for his nephew's account. The account receives rights to subscribe to additional stock held in the account. As custodian the uncle can:
  1. Sell the rights
  2. Subscribe to the stock
  3. Buy additional rights to subscribe if additional rights are needed
  4. Do whatever he considers to be in the best interest of the minor
A.
B.
C.
D.
218.  A registered representative should update a customer's account records for a change in:
  1. Address
  2. Net worth
  3. Employer
  4. Investment objectives
A.
B.
C.
D.
219.  Which two of the following are TRUE when opening new customer accounts?
  1. A P.O. box may be shown as the customer's address on the new account form.
  2. A street address must be reflected on the new account form.
  3. Customer correspondence may be sent to a P.O. box.
  4. Customer correspondence may not be sent to a P.O. box.
A.
B.
C.
D.
220.  Which of the following proxy rules would be correct regarding customer securities held in "street name" by a brokerage firm?
A.
B.
C.
D.
221.  Which of the following Moody's rated bonds would be considered speculative?
A.
B.
C.
D.
222.  A corporation has declared a two for one stock split payable on November 30th to holders of record on November 1st. The ex-date is December 1st. The first day that the stock will trade without a due bill attached is:
A.
B.
C.
D.
223.  A municipal bond with a 6% coupon is priced to a 7% basis. If this bond's yield-to-maturity increased by 40 basis points:
A.
B.
C.
D.
224.  As far as rights offerings are concerned:
A.
B.
C.
D.
225.  An investor owns a $100 convertible preferred stock which is convertible into 2 shares of common stock. The common is selling at $52 and the preferred is selling at $104. The preferred stock is called at 105. What should the investor do?
A.
B.
C.
D.
226.  Mr. Jones has a margin account in which there is activity each month. The firm would send Mr. Jones an account statement:
A.
B.
C.
D.
227.  A customer owns 500 shares of XYZ stock selling at $15 per share and $20,000 par value of State of Alabama GO bonds selling at 101. If both securities increased by 2 1/2 points, the dollar value of the increase would be:
A.
B.
C.
D.
228.  Pennsylvania Power Company has announced it will refund $100 million of its outstanding 12% bonds that were to mature in 2020. The bonds will be refunded at 106.75% of par value from the proceeds of a $100 million refunding issue. The refunding issue has a 6% coupon rate and matures in 2012. Bondholders who owned 12% bonds maturing in 2020 will receive:
A.
B.
C.
D.
229.  Which of the following transactions must be executed in a cash account?
A.
B.
C.
D.
230.  A corporation calls for redemption 1,000,000 shares of convertible preferred stock. The corporation announces that the convertible preferred will be redeemed at a price of $20 plus an accumulated dividend of 12 cents. Each share of preferred can be converted into 1/2 share of common. The preferred stock is selling at $19. There are 2,000,000 shares of common outstanding. Earnings for the common stock is $2.50 per share. The common stock is selling at 35.75. What would the market price of the preferred stock be if it were selling at parity with the common stock?
A.
B.
C.
D.
231.  Shares that are issued but not outstanding are classified as:
A.
B.
C.
D.
232.  A registered representative is accused of violating an SRO rule. The complaint is heard by a Hearing Panel of FINRA. All of the following are possible outcomes EXCEPT:
A.