Bond Mutual Funds: Test Your Investment Knowledge! Trivia Quiz
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- 1.All subscribers to a new issue of securities must:
- A.
Receive a confirmation before the issue date
- B.
Receive a prospectus no later than the confirmation of their purchase
- C.
Receive red herring prior to purchase
- D.
Pay a commission even if the securities are not purchased
- 2.An individual is seeking an investment that offers high liquidity. Which of the following would best suit this need?
- A.
Municipal bonds
- B.
Variable annuities
- C.
Money market funds
- D.
Whole life insurance
- 3.
- A.
The RR did not have to give the complaint to the branch manager unless it contained an allegation that the customer lost money as a result of the reccomendation by the RR
- B.
The branch manager must immediately send a copy of the complaint to the NASD Arbitration Department, which will decide if an arbitration hearing is necessary
- C.
The branch manager must keep a copy of the complaint in a seperate complaint file, along with a record of action taken on the complaint, if any.
- D.
The RR should not have given the complaint to the manager until the client waas contacted and an attempt was made to rectify the complaint.
- 4.If inflation were rising at an above average rate, the type of mutual fund that would typically increase in value is a:
- A.
Ginnie Mae Fund
- B.
Municipal bond fund
- C.
Leisure stock fund
- D.
Precious metals fund
- 5.
- A.
Terminates upon the representative's resignation
- B.
Remains effective for five days following termination
- C.
Remains effective for 30 days following termination
- D.
Remains effective for two years following termination
- 6.
- A.
If the order was unsolicited
- B.
If winthrop is not a dealer for the fund
- C.
As long as winthrop does not assess a sales charge for the transaction
- D.
Under no circumstances
- 7.An investor buys 200 shares of TDX at $20 per share. TDX declares a 10% stock dividend. The investor's cost basis per share for tax purposes would be:
- A.
18.00
- B.
18.18
- C.
22.00
- D.
40.00
- 8.
- A.
The account is covered in full as long as the customer is not a partner of the broker dealer
- B.
SIPC will cover $500,000 of the accounts value; the customer has no legal recourse on the remaining value of the account
- C.
SIPC will over $500,000 of the accounts value; the customer has a claim for the rest as a general creditor of the firm
- D.
SIPC will cover $500,000 of the account's value; FDIC will cover the rest of the claim
- 9.
- A.
May not contain performance data
- B.
Could be misleading if portrayed in a manner that implied past gains or income produced would be repeated in the future
- C.
Must be filed with the SEC within 10 days of use
- D.
Filed with the NASD is considered to have been filed with the SEC
- 10.
- A.
Will be taxed to the investor during the accumulation period as ordinary income
- B.
Is taxable only to the seperate account
- C.
Will increase an annuitant's monthly payment from the annuity
- D.
Will have no effect on the investor because the investor is guaranteed only a 4% payment increase during the year
- 11.
- A.
The lesser of 10 years or the life of the company or account
- B.
The lesser of 5 years or the life of the company or account
- C.
The lesser of 1 year or the life of the company or account
- D.
The period since the fund last published performance data
- 12.In an account opened under the Uniform Gifts/Transfers to Minors Act, the primary social security number is the:
- A.
Custodian's
- B.
Parent's
- C.
Minor's
- D.
RR's
- 13.Which of the following would not be found in a mutual fund prospectus?
- A.
The method used to compute a CDSC
- B.
The annual payment to the custodian bank
- C.
Per-share income and capital changes
- D.
Exchange privelages within a family of funds
- 14.The life insurance policy that allows for the greatest flexibility regarding the payment of premiums is:
- A.
Decreasing term
- B.
Universal
- C.
Variable
- D.
Split dollar
- 15.Which of the following have a fixed rate of interest on their face?
- A.
Treasury bonds
- B.
Treasury notes
- C.
Treasury bills
- 16.The board of directors of a fund must review expenditures paid pursuant to a 12b 1 plan:
- A.
Monthly
- B.
Quarterly
- C.
Annually
- D.
At each meeting of the board of directors
- 17.All of the following are guaranteed EXCEPT the:
- A.
Return on a fixed annuity contract
- B.
Payment of principal and interest on a US government obligation
- C.
Cash value on a variable life insurance policy
- D.
Death benefit on a whole life insurance policy
- 18.
- A.
Under no conditions
- B.
Only as long as Marjorie remains and employee of the firm
- C.
As long as Marjorie is not paid form accounts opened after she retires
- D.
There are no conditions placed on this arrangement as long as the contract is legally binding
- 19.When the discount rate increases, the prices of high-grade bonds would tend to:
- A.
Rise
- B.
Fall
- C.
Remain the same
- D.
Parallel the prime interest rate
- 20.The management fee of a mutual fund pays to its investment adviser is considered:
- A.
An operating cost of the fund
- B.
Part of the acquisition cost (sales charge) the purchaser must pay
- C.
A cost to the sponsor (distributor) of the fund
- D.
A nonrecurring expense of the sponsor
- 21.All of the following are typical characteristics of a 401k plan EXCEPT:
- A.
Employee contributions are fully and immediately vested
- B.
Employees must match employee contributions
- C.
An employee's taxable income is reduced by employee contributions
- D.
Employee contributions grow on a tax deferred basis
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