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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.  The primary purpose of a self-regulatory organization (SRO) is to:
A.
B.
C.
D.
2.  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.
3.  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.
4.  The proceeds of the sale of a municipal bond issue are invested in U.S. government securities that are sufficient to cover interest, principal, and call premiums on an outstanding bond issue. The outstanding bonds are called:
A.
B.
C.
D.
5.  All of the following are true about warrants EXCEPT:
A.
B.
C.
D.
6.  A customer would like to open an account designated by number. The registered representative should:
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.  Discretionary accounts require:
A.
B.
C.
D.
9.  Which of the following statements is true regarding warrants?
A.
B.
C.
D.
10.  Which of the following is TRUE regarding numbered accounts?
A.
B.
C.
D.
11.  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.
12.  A client would like all trade confirmations sent to his investment adviser. This will require:
A.
B.
C.
D.
13.  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.
14.  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.
15.  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.
16.  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.
17.  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.
18.  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.
19.  The purpose of a sinking fund is for redeeming a corporation's
A.
B.
C.
D.
20.  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.
21.  All of the following would normally be a characteristic of a growth company EXCEPT that it has a:
A.
B.
C.
D.
22.  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.
23.  Which two of the following are NOT SROs?
  1. MSRB
  2. SIPC
  3. FINRA
  4. SEC
A.
B.
C.
D.
24.  A corporation wishes to open a cash account. Which of the following is required?
A.
B.
C.
D.
25.  A corporation's shareholders must vote for:
A.
B.
C.
D.
26.  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.
27.  All of the following are true regarding discretionary accounts EXCEPT:
A.
B.
C.
D.
28.  In establishing a defensive portfolio, which of the following types of company stocks should not be included?
A.
B.
C.
D.
29.  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.
30.  An outstanding municipal bond would most likely be called when interest rates:
A.
B.
C.
D.
31.  The number of custodians allowed for each minor under the Uniform Gifts to Minors Act may not be more than:
A.
B.
C.
D.
32.  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.
33.  Supplemental documentation would be required when opening all of the following types of accounts EXCEPT:
A.
B.
C.
D.
34.  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.
35.  Which of the following would be acceptable as a custodian on a UGMA account?
A.
B.
C.
D.
36.  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.
37.  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.
38.  A .05 change in basis would have the greatest effect on which of the following 6.00% coupon bonds?
A.
B.
C.
D.
39.  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.
40.  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.
41.  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.
42.  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.
43.  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.
44.  When a bond is selling at a premium:
A.
B.
C.
D.
45.  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.
46.  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.
47.  A registered rep holding limited discretionary authority over a customer's account may:
A.
B.
C.
D.
48.  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.
49.  Which of the following proxy rules would be correct regarding customer securities held in "street name" by a brokerage firm?
A.
B.
C.
D.
50.  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.
B.
C.
D.
51.  The securities that are deposited in an escrow account for an advanced refunding are:
A.
B.
C.
D.
52.  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.
53.  Which of the following risk factors are the most important for purchasers of long-term high-grade bonds?
A.
B.
C.
D.
54.  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.
55.  Which of the following would be an invalid endorsement on a stock certificate?
A.
B.
C.
D.
56.  Which of the following would probably be most leveraged?
A.
B.
C.
D.
57.  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.
58.  Term bond quotes are based on:
A.
B.
C.
D.
59.  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.
60.  All of the following are true about treasury stock EXCEPT it:
A.
B.
C.
D.
61.  Under industry rules the final approval to open a new account is given by a(n):
A.
B.
C.
D.
62.  A company declares a forward stock split. What is the effect on the stock's par value?
A.
B.
C.
D.
63.  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.
64.  When a stock splits 5 for 4, by what percentage will the price of the stock be reduced?
A.
B.
C.
D.
65.  A customer wants to open a cash account. All of the following are required on the new account form EXCEPT:
A.
B.
C.
D.
66.  Which of the following could not be accomplished in a cash account?
A.
B.
C.
D.
67.  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.
68.  Upon learning of the death of a customer, a registered representative should do all of the following EXCEPT:
A.
B.
C.
D.
69.  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.
70.  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.
71.  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.
72.  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.
73.  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.
74.  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.
75.  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.
76.  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.
77.  Why would a new account be designated TOD?
A.
B.
C.
D.
78.  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.
79.  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.
80.  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.
81.  A common shareholder has all of the following rights EXCEPT the right to:
A.
B.
C.
D.
82.  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.
83.  Which of the following statements is true regarding a custodian account?
A.
B.
C.
D.
84.  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.
85.  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.
86.  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.
87.  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.
88.  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.
89.  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.
90.  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.
91.  An investor who has granted power of attorney to his son dies. The power of attorney:
A.
B.
C.
D.
92.  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.
93.  Mr. Jones requests that his securities be held in street name. To honor his request, the broker-dealer must:
A.
B.
C.
D.
94.  All of the following are TRUE about discretionary accounts EXCEPT:
A.
B.
C.
D.
95.  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 owns 87 shares of the XYZ Corporation. How many shares can he subscribe to and how much will it cost him?
A.
B.
C.
D.
96.  Shares that are issued but not outstanding are classified as:
A.
B.
C.
D.
97.  Exclusions from the definition of an investment adviser are given to which of the following?
A.
B.
C.
D.
98.  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.
99.  If the Federal Reserve Board increased the discount rate, you would expect:
A.
B.
C.
D.
100.  If a client's account is inactive, how often does a statement have to be mailed?
A.
B.
C.
D.
101.  Prior employer permission would be required for a registered representative to give public:
  1. Speeches
  2. Seminars
  3. Lectures
A.
B.
C.
D.
102.  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.
103.  Warrants would most likely be issued to:
A.
B.
C.
D.
104.  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.
105.  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.
106.  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.
107.  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.
108.  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.
109.  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.
110.  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.
111.  Which of the following would have the least capital risk for a client?
A.
B.
C.
D.
112.  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.
113.  Of the different securities listed below, the one with the longest expiration date would normally be a:
A.
B.
C.
D.
114.  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.
115.  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.
116.  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.
117.  From the issuer's perspective, when comparing term bonds and serial bonds, serial bonds have:
A.
B.
C.
D.
118.  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.
119.  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.
120.  A Suspicious Activity Report (SAR) should be filed:
A.
B.
C.
D.
121.  In which of the following situations must a broker-dealer file a Currency Transaction Report (CTR)?
A.
B.
C.
D.
122.  All of the following should be obtained by a registered representative when opening a new account for a customer EXCEPT:
A.
B.
C.
D.
123.  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.
124.  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.
125.  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.
126.  If an investor is primarily seeking capital gains, when would be the best time to buy bonds?
A.
B.
C.
D.
127.  Which of the following best describes a wrap account?
A.
B.
C.
D.
128.  An uncle is the custodian for a nephew's account. When the nephew reaches majority, the uncle:
A.
B.
C.
D.
129.  Which of the following outside business activities would RRs NOT have to report to their employing broker-dealer?
A.
B.
C.
D.
130.  As far as rights offerings are concerned:
A.
B.
C.
D.
131.  Municipal bond rating organizations are primarily concerned with the risk of:
A.
B.
C.
D.
132.  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.
133.  During periods of tight money, when the yield curve becomes inverted, the highest yield would probably be found in:
A.
B.
C.
D.
134.  A customer wants safety and preservation of capital. He should purchase:
A.
B.
C.
D.
135.  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.
136.  A registered representative who wishes to have outside employment must notify and receive permission from the:
A.
B.
C.
D.
137.  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 value of the outstanding common stock on the balance sheet is:
A.
B.
C.
D.
138.  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.
139.  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.
140.  A stock closes at $37. The next day the stock sells ex-dividend $0.68 per share. At what price should the stock open the next day if it opens at the same level it closed the day before?
A.
B.
C.
D.
141.  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.
142.  Which of the following would increase most in price if interest rates decline?
A.
B.
C.
D.
143.  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.
144.  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.
145.  Which of the following would be a benefit of an account that is designated Transfer on Death (TOD)?
A.
B.
C.
D.
146.  Which of the following Moody's rated bonds would be considered speculative?
A.
B.
C.
D.
147.  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.
148.  The Board of Directors of a corporation is responsible for establishing all of the following EXCEPT the:
A.
B.
C.
D.
149.  The Securities Investors Protection Corporation (SIPC) insures all of the following accounts EXCEPT:
A.
B.
C.
D.
150.  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.
151.  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.
152.  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.
153.  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.
154.  A client would like to open a numbered account. An RR may open the account:
A.
B.
C.
D.
155.  The American Telephone Company announced in an ad in The Wall Street Journal that it intends to call for redemption all of its outstanding 10% callable bonds at 103 1/4 plus accrued interest. The market price of the bonds was 102 3/4 at the time of the announcement. Which alternative is most advantageous to the bondholder?
A.
B.
C.
D.
156.  When a bond is registered as to principal only, this means that the bond has been issued:
A.
B.
C.
D.
157.  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.
158.  To whom may a registered representative appeal a finding by a Hearing Panel?
A.
B.
C.
D.
159.  ABC Corporation announces a 5-for-4 split. After the split the market price of ABC Corporation will be reduced by:
A.
B.
C.
D.
160.  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.
161.  A municipality would refund a revenue bond issue for all of the following reasons EXCEPT to:
A.
B.
C.
D.
162.  All of the following are true about a dividend paid by a corporation to its shareholders EXCEPT the dividend:
A.
B.
C.
D.
163.  A municipal bond issue with an inverted yield scale would have:
A.
B.
C.
D.
164.  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.
165.  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 growth company?
A.
B.
C.
D.
166.  Arbitration decisions are:
A.
B.
C.
D.
167.  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.
168.  All of the following would be included on an option confirmation EXCEPT:
A.
B.
C.
D.
169.  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.
170.  Dow Chemical bonds are listed in the NYSE bond table as having closed the previous day at 91 7/8. The closing price of Dow Chemical bonds is:
A.
B.
C.
D.
171.  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.
172.  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.
173.  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.
174.  All of the following are TRUE regarding accounts established under the Uniform Gifts to Minors Act EXCEPT the:
A.
B.
C.
D.
175.  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.
176.  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.
177.  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.
178.  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.
179.  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.
180.  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.
181.  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.
182.  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.
183.  Which of the following companies would most likely pay a dividend in stock rather than cash?
A.
B.
C.
D.
184.  A new convertible bond has a provision that it cannot be called for five years after the issue date. This call protection would be most valuable to a recent purchaser of the bond if:
A.
B.
C.
D.
185.  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.
186.  Which of the following would be characteristic of a call protection provision?
A.
B.
C.
D.
187.  New Issue $50,000,000 City of Denver, Colorado Pollution Control Bonds Par Value $1,000 Amount Rate Maturity Date Price $50,000 5 1/2% July 1, 2017 100 $60,000 6 1/2% July 1, 2018 100 Based on the above information, which of the following statements can be made about the bonds maturing in 2017?
  1. The yield to maturity will be the same as the nominal rate.
  2. The yearly interest payment is $55 per bond.
  3. The bond will yield 5 1/2%.
  4. The bonds will all be issued at the same dollar price.
A.
B.
C.
D.
188.  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.
189.  SEC regulations state that a brokerage firm must provide a current financial statement (balance sheet) to:
A.
B.
C.
D.
190.  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.
191.  SIPC is a(n):
A.
B.
C.
D.
192.  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.
193.  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.
194.  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.
195.  A corporation would primarily split its stock to:
A.
B.
C.
D.
196.  Which of the following would be most likely considered a defensive stock?
A.
B.
C.
D.
197.  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.
198.  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.
199.  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.
200.  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.
201.  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.
202.  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.
203.  If interest rates decline, which of the following securities would probably have the greatest increase in market value?
A.
B.
C.
D.
204.  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.
205.  Which of the following would NOT require additional documentation to transfer stock?
A.
B.
C.
D.
206.  The current yield on a $1,000 par value 5% bond selling at $800 maturing in 10 years is:
A.
B.
C.
D.
207.  A 5% $1,000 par value bond sells at $900 and is redeemed in 10 years. What is the amount of interest per year?
A.
B.
C.
D.
208.  Which of the following statements are TRUE concerning custodian accounts?
A.
B.
C.
D.
209.  Fully paid customer securities held at a brokerage firm:
A.
B.
C.
D.
210.  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.
211.  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.
212.  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.
213.  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.
214.  Two brothers open a joint account to trade options. Who will be required to sign the option agreement?
A.
B.
C.
D.
215.  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.
216.  Which of the following transactions must be executed in a cash account?
A.
B.
C.
D.
217.  All of the following are TRUE of treasury stock EXCEPT it:
A.
B.
C.
D.
218.  An account executive has limited discretion over a customer's account. The account executive can:
A.
B.
C.
D.
219.  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.
220.  Under what circumstances may a husband and wife both be custodians for a minor's account?
A.
B.
C.
D.
221.  Which of the following would probably have the greatest fluctuation in price when interest rates move up or down?
A.
B.
C.
D.
222.  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.
223.  Which of the following would most likely have a mandatory sinking fund?
A.
B.
C.
D.
224.  When comparing long-term bonds to short-term bonds, all of the following are TRUE EXCEPT:
A.
B.
C.
D.
225.  Concerning Moody's ratings, which is the most speculative in the investment grade category?
A.
B.
C.
D.
226.  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 also owns 87 shares of the preferred stock of the XYZ Corporation. How many additional shares can he subscribe to and at what cost?
A.
B.
C.
D.
227.  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.