Annie Stc Quiz Part 1

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

  
Changes are done, please start the quiz.


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1.  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.
2.  All of the following statements regarding the privacy notice of a broker dealer are true EXCEPT:
A.
B.
C.
D.
3.  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.
4.  When comparing long-term bonds to short-term bonds, all of the following are TRUE EXCEPT:
A.
B.
C.
D.
5.  All of the following would normally be a characteristic of a growth company EXCEPT that it has a:
A.
B.
C.
D.
6.  As far as rights offerings are concerned:
A.
B.
C.
D.
7.  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.
8.  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.
9.  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.
10.  All of the following are true regarding the role of a transfer agent EXCEPT that the transfer agent:
A.
B.
C.
D.
11.  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.
12.  Concerning arbitration, all of the following are TRUE EXCEPT:
A.
B.
C.
D.
13.  The purpose of a sinking fund is for redeeming a corporation's
A.
B.
C.
D.
14.  When a bond is registered as to principal only, this means that the bond has been issued:
A.
B.
C.
D.
15.  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.
16.  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.
17.  All of the following would be included on an option confirmation EXCEPT:
A.
B.
C.
D.
18.  Which of the following is TRUE regarding numbered accounts?
A.
B.
C.
D.
19.  Under what circumstances may a husband and wife both be custodians for a minor's account?
A.
B.
C.
D.
20.  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.
21.  Which of the following would increase most in price if interest rates decline?
A.
B.
C.
D.
22.  Term bond quotes are based on:
A.
B.
C.
D.
23.  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.
24.  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.
25.  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.
26.  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.
27.  A company declares a forward stock split. What is the effect on the stock's par value?
A.
B.
C.
D.
28.  Which of the following statements is true regarding warrants?
A.
B.
C.
D.
29.  A municipality would refund a revenue bond issue for all of the following reasons EXCEPT to:
A.
B.
C.
D.
30.  A .05 change in basis would have the greatest effect on which of the following 6.00% coupon bonds?
A.
B.
C.
D.
31.  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.
32.  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.
33.  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.
34.  Which of the following best describes a wrap account?
A.
B.
C.
D.
35.  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.
36.  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.
37.  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.
38.  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.
39.  Prior employer permission would be required for a registered representative to give public:
  1. Speeches
  2. Seminars
  3. Lectures
A.
B.
C.
D.
40.  All of the following are true regarding discretionary accounts EXCEPT:
A.
B.
C.
D.
41.  SIPC is a(n):
A.
B.
C.
D.
42.  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.
43.  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.
44.  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.
45.  Which of the following statements are TRUE concerning custodian accounts?
A.
B.
C.
D.
46.  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.
47.  A client would like to open a numbered account. An RR may open the account:
A.
B.
C.
D.
48.  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.
49.  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.
50.  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.
51.  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.
52.  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.
53.  An outstanding municipal bond would most likely be called when interest rates:
A.
B.
C.
D.
54.  If the Federal Reserve Board increased the discount rate, you would expect:
A.
B.
C.
D.
55.  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.
56.  During periods of tight money, when the yield curve becomes inverted, the highest yield would probably be found in:
A.
B.
C.
D.
57.  An account executive has limited discretion over a customer's account. The account executive can:
A.
B.
C.
D.
58.  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.
59.  Which two of the following are NOT SROs?
  1. MSRB
  2. SIPC
  3. FINRA
  4. SEC
A.
B.
C.
D.
60.  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.
61.  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.
62.  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.
63.  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.
64.  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.
65.  When a stock splits 5 for 4, by what percentage will the price of the stock be reduced?
A.
B.
C.
D.
66.  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.
67.  Which of the following would have the least capital risk for a client?
A.
B.
C.
D.
68.  The current yield on a $1,000 par value 5% bond selling at $800 maturing in 10 years is:
A.
B.
C.
D.
69.  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.
70.  Which of the following would be most suitable for a Non-Managed Fee-Based Account?
A.
B.
C.
D.
71.  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.
72.  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.
73.  All of the following are true about warrants EXCEPT:
A.
B.
C.
D.
74.  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.
75.  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.
76.  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.
77.  A registered rep holding limited discretionary authority over a customer's account may:
A.
B.
C.
D.
78.  Which of the following outside business activities would RRs NOT have to report to their employing broker-dealer?
A.
B.
C.
D.
79.  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.
80.  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.
81.  A corporation's shareholders must vote for:
A.
B.
C.
D.
82.  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.
83.  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.
84.  Which of the following transactions must be executed in a cash account?
A.
B.
C.
D.
85.  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.
86.  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.
87.  Two brothers open a joint account to trade options. Who will be required to sign the option agreement?
A.
B.
C.
D.
88.  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.
89.  Which of the following would NOT require additional documentation to transfer stock?
A.
B.
C.
D.
90.  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.
91.  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.
92.  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.
93.  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.
94.  The Securities Investors Protection Corporation (SIPC) insures all of the following accounts EXCEPT:
A.
B.
C.
D.
95.  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.
96.  To whom may a registered representative appeal a finding by a Hearing Panel?
A.
B.
C.
D.
97.  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.
98.  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.
99.  Supplemental documentation would be required when opening all of the following types of accounts EXCEPT:
A.
B.
C.
D.
100.  Upon learning of the death of a customer, a registered representative should do all of the following EXCEPT:
A.
B.
C.
D.
101.  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.
102.  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.
103.  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.
104.  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.
105.  Which of the following would probably be most leveraged?
A.
B.
C.
D.
106.  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.
107.  An uncle is the custodian for a nephew's account. When the nephew reaches majority, the uncle:
A.
B.
C.
D.
108.  The purpose of cumulative voting is to:
A.
B.
C.
D.
109.  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.
110.  A customer would like to open an account designated by number. The registered representative should:
A.
B.
C.
D.
111.  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.
112.  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.
113.  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.
114.  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.
115.  When comparing long-term bonds and short-term bonds, all of the following are true EXCEPT:
A.
B.
C.
D.
116.  An investor who has granted power of attorney to his son dies. The power of attorney:
A.
B.
C.
D.
117.  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.
118.  An investor purchases a 20-year 5% bond at par value which will yield 5 3/4% if called at the first call date in five years. The yield-to-maturity on bond is:
A.
B.
C.
D.
119.  Which of the following companies would most likely pay a dividend in stock rather than cash?
A.
B.
C.
D.
120.  Warrants would most likely be issued to:
A.
B.
C.
D.
121.  All of the following are TRUE regarding the Uniform Gifts to Minors Act EXCEPT:
A.
B.
C.
D.
122.  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.
123.  Concerning Moody's ratings, which is the most speculative in the investment grade category?
A.
B.
C.
D.
124.  A common shareholder has all of the following rights EXCEPT the right to:
A.
B.
C.
D.
125.  If interest rates decline, which of the following securities would probably have the greatest increase in market value?
A.
B.
C.
D.
126.  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.
127.  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.
128.  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.
129.  Under industry rules the final approval to open a new account is given by a(n):
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.  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.
132.  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.
133.  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.
134.  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.
135.  Municipal bond rating organizations are primarily concerned with the risk of:
A.
B.
C.
D.
136.  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.
137.  A customer wants to open a cash account. All of the following are required on the new account form EXCEPT:
A.
B.
C.
D.
138.  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.
139.  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.
140.  In establishing a defensive portfolio, which of the following types of company stocks should not be included?
A.
B.
C.
D.
141.  SEC regulations state that a brokerage firm must provide a current financial statement (balance sheet) to:
A.
B.
C.
D.
142.  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.
143.  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.
144.  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.
145.  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.
146.  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.
147.  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.
148.  Fully paid customer securities held at a brokerage firm:
A.
B.
C.
D.
149.  Which of the following would be a benefit of an account that is designated Transfer on Death (TOD)?
A.
B.
C.
D.
150.  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.
151.  The primary purpose of a self-regulatory organization (SRO) is to:
A.
B.
C.
D.
152.  Which of the following would probably have the greatest fluctuation in price when interest rates move up or down?
A.
B.
C.
D.
153.  In which of the following situations must a broker-dealer file a Currency Transaction Report (CTR)?
A.
B.
C.
D.
154.  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.
155.  Which of the following would be an invalid endorsement on a stock certificate?
A.
B.
C.
D.
156.  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.
157.  Of the different securities listed below, the one with the longest expiration date would normally be a:
A.
B.
C.
D.
158.  All of the following are TRUE about discretionary accounts EXCEPT:
A.
B.
C.
D.
159.  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.
160.  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.
161.  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.
162.  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.
163.  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.
164.  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.
165.  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.
166.  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.
167.  A customer wants safety and preservation of capital. He should purchase:
A.
B.
C.
D.
168.  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: