Series 79 Financial Industry Regulatory Authority (Finra) Quiz

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  • 1/187 Questions

    True or False, an officer, director or owner of more than 10% of voting securities is considered an insider.

    • True
    • False
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About This Quiz

The Financial Industry Regulatory Authority (FINRA) is a body that provides tools, templates and other resources to small firms of not more than 150 representatives to protect investors. Learn more about this body below. All the best.

Finance Quizzes & Trivia

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  • 2. 

    On a balance Sheet, cash, Marketable securities, Accounts Receivable, and inventory are all an example of

    • Current Assets

    • Current Liabilities

    • Fixed Assets

    • Long-Term Liabilities

    • Intangibles

    Correct Answer
    A. Current Assets
    Explanation
    Cash, marketable securities, accounts receivable, and inventory are all examples of current assets. Current assets are assets that are expected to be converted into cash or used up within one year or within the normal operating cycle of a business. These assets are easily liquidated and are crucial for the day-to-day operations of a company. They represent the resources that a company can readily use to meet its short-term obligations and fund its ongoing operations.

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  • 3. 

    Goodwill and other intangible assets are only compared when the fair value is under the book value. For instance the fair value is 120 and the book value is 145, what is the impairment charge?

    • $10mm

    • $20mm

    • $25mm

    • $50mm

    Correct Answer
    A. $25mm
    Explanation
    When the fair value of goodwill and other intangible assets is less than the book value, it indicates that there is an impairment. In this case, the fair value is $120 and the book value is $145, showing a difference of $25. Therefore, the impairment charge would be $25mm.

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  • 4. 

    Which best describes front running?

    • Wash sales

    • Trading ahead of client orders

    • Pegging

    • Capping

    Correct Answer
    A. Trading ahead of client orders
    Explanation
    Front running refers to the unethical practice of a broker or trader executing orders on a security for their own benefit before executing orders on behalf of their clients. This allows the broker or trader to take advantage of the anticipated price movement resulting from the client's order. By trading ahead of client orders, the broker or trader can potentially profit from the price movement caused by the client's order, at the expense of the client's best interests.

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  • 5. 

    An example of a fixed income investment is

    • A common stock

    • A preferred stock

    • A Bond

    Correct Answer
    A. A Bond
    Explanation
    A bond is an example of a fixed income investment because it represents a loan made by an investor to a borrower, typically a government or a corporation. When an individual purchases a bond, they are essentially lending money to the issuer in exchange for regular interest payments and the return of the principal amount at maturity. Unlike stocks, which represent ownership in a company and can have fluctuating returns, bonds provide a fixed stream of income over a specific period of time, making them a reliable source of income for investors.

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  • 6. 

    If AMR is offering a put valued at $35 and the market price is $35 it is

    • In the money

    • At the money

    • Out of the money

    Correct Answer
    A. At the money
    Explanation
    If AMR is offering a put valued at $35 and the market price is also $35, it means that the option is currently trading at its intrinsic value. In this case, the option is neither in the money (where the market price is higher than the strike price) nor out of the money (where the market price is lower than the strike price). Therefore, the correct answer is "at the money."

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  • 7. 

    Which best describes Reserve Requirement?

    • Extension of credit by broker-dealer

    • The only rate directly controlled by Fed

    • Amount of money a bank must maintain based on a percentage of deposits.

    Correct Answer
    A. Amount of money a bank must maintain based on a percentage of deposits.
    Explanation
    The reserve requirement refers to the amount of money that a bank is required to keep on hand, based on a percentage of its deposits. This is a regulation set by the central bank, in this case, the Fed. The purpose of the reserve requirement is to ensure that banks have enough funds to cover potential withdrawals by their customers and maintain stability in the banking system. By setting a reserve requirement, the central bank can influence the amount of money available for lending and control the money supply in the economy.

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  • 8. 

    On a balance Sheet, which is an example of intangibles?

    • Buildings

    • Goodwill

    • Paid-in-capital

    • Bonds

    Correct Answer
    A. Goodwill
    Explanation
    Goodwill is an example of intangibles on a balance sheet. Goodwill represents the value of a company's reputation, brand image, customer loyalty, and other intangible assets that cannot be physically measured. It is typically generated through acquisitions or mergers, where the purchasing company pays a premium for the target company's intangible assets. Goodwill is recorded on the balance sheet as an intangible asset and is subject to periodic impairment tests to ensure its value is accurately reflected.

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  • 9. 

    An adjustment of conversion prices and ratios has been issued. the original price is $100 what is the conversion price and conversion ratio after the 2:1 split?

    • Price = 100 ratio 10:1

    • Price = $50 Ratio 20:1

    • Price = $25 Ratio 20:1

    Correct Answer
    A. Price = $50 Ratio 20:1
    Explanation
    After a 2:1 split, the original price of $100 is divided by 2, resulting in a new price of $50. The conversion ratio remains the same at 20:1. This means that for every $50, one share can be converted.

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  • 10. 

    Where would Retained Earnings and common/preferred stock go on a balance sheet?

    • Fixed Assets

    • Current Assets

    • Intangibles

    • Shareholder's Equity

    Correct Answer
    A. Shareholder's Equity
    Explanation
    Retained Earnings and common/preferred stock would go under Shareholder's Equity on a balance sheet. Shareholder's Equity represents the ownership interest in a company, and it includes the retained earnings, which are the accumulated profits that have not been distributed as dividends, and the common/preferred stock, which represents the ownership shares held by the shareholders. Including these items under Shareholder's Equity provides a clear representation of the company's financial position and the claims of its owners.

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  • 11. 

    If walker shoes (WS) buys 25% of Absolute Runner (AR) for $30 million, how would WS account for $10 million of net income by AR?

    • WS would absorb 25% of AR earnings on Income statements (WS would increase by 2.5 million) (10 million - 25%= 2.5mm)

    • ^^ Study the answer above

    Correct Answer
    A. WS would absorb 25% of AR earnings on Income statements (WS would increase by 2.5 million) (10 million - 25%= 2.5mm)
    Explanation
    When Walker Shoes buys 25% of Absolute Runner for $30 million, they would account for $10 million of net income by AR by absorbing 25% of AR earnings on their income statements. This means that WS would increase by $2.5 million (25% of $10 million). The calculation of $10 million - 25% = $2.5 million represents the portion of AR's net income that WS would absorb.

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  • 12. 

    When referring to TIPS, ( treasury inflation protected securities) (principle adjusted based on CPI). assume we had a principle of $1,000, a coupon of 4% and a payment of $40.00. what will be the payment if CPI increases by 1%?

    • Principle $1,600 payment is $40.90

    • Principle is $1,010 payment is $40.40

    Correct Answer
    A. Principle is $1,010 payment is $40.40
    Explanation
    TIPS (Treasury Inflation Protected Securities) are adjusted based on the Consumer Price Index (CPI). In this scenario, the principle is $1,010, which means it has increased by 1% due to the increase in CPI. The payment remains the same at $40.40, as the coupon rate of 4% is applied to the adjusted principle. Therefore, the correct answer is that the payment is $40.40 when the CPI increases by 1%.

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  • 13. 

    If Long the Stock, the investor is

    • Bullish;option must be bearish

    • Bearish;option must be bullish

    Correct Answer
    A. Bullish;option must be bearish
    Explanation
    If an investor is "Long the Stock," it means they have bought the stock with the expectation that its price will increase. This indicates a bullish sentiment, as the investor believes the stock will perform well. On the other hand, if the option must be bearish, it means that the investor has purchased a bearish option, which is a type of financial contract that profits if the price of the underlying asset (in this case, the stock) decreases. Therefore, the given correct answer suggests that the investor is bullish on the stock but has chosen a bearish option, possibly as a hedge or to take advantage of a potential downward movement in the stock price.

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  • 14. 

    If short the stock, 

    • The investor is bullish; option must be bearish

    • The investor is bearish; option must be bullish

    Correct Answer
    A. The investor is bearish; option must be bullish
    Explanation
    The correct answer is that the investor is bearish and the option must be bullish. This is because when an investor "shorts" a stock, it means they are selling borrowed shares with the expectation that the stock price will decrease. This indicates a bearish outlook on the stock. On the other hand, if the option is bullish, it means the investor expects the stock price to increase. Therefore, the investor's bearish stance is contradictory to the bullish option, making it the correct answer.

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  • 15. 

    When Capping, you

    • Keep the price from falling

    • Keep the price from rising

    Correct Answer
    A. Keep the price from rising
    Explanation
    When capping, you are implementing a maximum limit on the price to prevent it from rising beyond a certain point. This is done to control inflation or to ensure that the price remains affordable for consumers. By setting a cap, the price cannot exceed the specified limit, providing stability and preventing any further increase.

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  • 16. 

    If material non public information is disclosed improperly, it must be disseminated to the public under what rule and what time limit?

    • Regulation FD 120 Days

    • Regulation FD 24 Hours

    Correct Answer
    A. Regulation FD 24 Hours
    Explanation
    Regulation FD requires that if material non-public information is disclosed improperly, it must be disseminated to the public within 24 hours. This rule ensures that all investors have equal access to important information, preventing unfair advantages for certain individuals or entities. By mandating the prompt disclosure of such information, Regulation FD promotes transparency and fairness in the financial markets.

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  • 17. 

    Xyz corp has a bond with a market price of $1,000 and is convertible at $20 per share. how many common shares can you convert to?

    • 20

    • 30

    • 40

    • 50

    Correct Answer
    A. 50
    Explanation
    The bond is convertible at a price of $20 per share. To determine the number of common shares that can be converted to, we divide the market price of the bond ($1,000) by the conversion price ($20). This gives us 50, indicating that 50 common shares can be converted from the bond.

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  • 18. 

    Monetary theory, which uses its monetary policy, utilizes ______ to accomplish its goals

    • Taxes & Expenditures

    • Money Supply

    Correct Answer
    A. Money Supply
    Explanation
    Monetary theory is a framework that focuses on the role of money in the economy and how it affects various economic variables. It utilizes monetary policy to achieve its goals. One of the key tools of monetary policy is the control of the money supply. By adjusting the money supply, central banks can influence interest rates, inflation, and overall economic activity. Therefore, the correct answer is "Money Supply" as it is an essential component of monetary theory and its policy implementation.

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  • 19. 

    A contract that states "if the issuer defaults on one of their bonds, other than mine, they will automatically default on mine" is an example of:

    • Bond default

    • Cross Default

    • Default Penalties

    Correct Answer
    A. Cross Default
    Explanation
    A contract that includes a clause stating that if the issuer defaults on any of their bonds, except for the one belonging to the contract holder, it will automatically trigger a default on the contract holder's bond is an example of a Cross Default. This means that the issuer's failure to meet their obligations on one bond will result in a default on all other bonds, including the one held by the contract holder.

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  • 20. 

    An issuer is looking to raise $100mm, he issues bonds featuring coupons that all mature on one date. What kind of bond is this an example of?

    • Serial Bond

    • Term Maturity Bond

    • Convertible Bond

    • Sinking Fund

    Correct Answer
    A. Term Maturity Bond
    Explanation
    This is an example of a Term Maturity Bond. In this type of bond, all the bonds issued have the same maturity date. The issuer is looking to raise a specific amount of money, in this case, $100mm, and the bonds will all mature on a single date. This means that all bondholders will receive their principal back on the same date.

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  • 21. 

    What is the CURRENT YIELD, if the Nominal Yield is 8% and the bond price is $1,000

    • 2%

    • 4%

    • 6%

    • 8%

    • 10%

    Correct Answer
    A. 8%
    Explanation
    The current yield is calculated by dividing the annual interest payment by the bond price. In this case, since the nominal yield is 8% and the bond price is $1,000, the annual interest payment would be 8% of $1,000, which is $80. Dividing $80 by $1,000 and multiplying by 100 gives us a current yield of 8%.

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  • 22. 

    If your trading a bond at a premium, the yield to maturity is

    • Higher

    • Lower

    Correct Answer
    A. Lower
    Explanation
    When trading a bond at a premium, it means that the bond is being sold at a price higher than its face value. This implies that the bond's coupon rate is higher than the prevailing market interest rates. As a result, the yield to maturity, which represents the total return an investor can expect to earn from a bond if held until maturity, will be lower. This is because the higher price paid for the bond reduces the overall yield percentage. Therefore, the correct answer is "Lower."

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  • 23. 

    On a balance sheet, Land, Buildings, and Equipment are all an example of 

    • Current Assets

    • Long-Term Liabilities

    • Fixed Assets

    • Intangibles

    Correct Answer
    A. Fixed Assets
    Explanation
    Land, Buildings, and Equipment are all examples of Fixed Assets on a balance sheet. Fixed assets are long-term tangible assets that are used in the operations of a business and are not intended for sale. They are expected to provide economic benefits to the company for more than one year. Land represents the value of the property owned by the company, buildings are the structures on the land, and equipment refers to the machinery, vehicles, and other tools used in the business. These assets are not easily converted into cash and are typically depreciated over their useful lives.

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  • 24. 

    Dividends are determined by

    • Officer

    • Principle

    • BOD

    • Shareholders

    Correct Answer
    A. BOD
    Explanation
    The Board of Directors (BOD) determines dividends. The BOD is responsible for making important decisions regarding the company's financial matters, including the distribution of profits to shareholders in the form of dividends. They consider various factors such as the company's financial performance, cash flow, and future growth prospects before deciding on the dividend amount. The BOD's decision is crucial as it directly impacts the shareholders' returns on their investment in the company.

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  • 25. 

    If your trading a bond at a discount, the yield to maturity is 

    • Lower

    • Higher

    Correct Answer
    A. Higher
    Explanation
    When trading a bond at a discount, the yield to maturity is higher. This is because the yield to maturity represents the total return an investor can expect to receive if they hold the bond until it matures. When a bond is trading at a discount, it means its current market price is lower than its face value. As a result, investors can purchase the bond at a lower price and receive higher interest payments relative to the purchase price. This higher interest income leads to a higher yield to maturity.

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  • 26. 

    Who is responsible for the implementation of Monetary Theory?

    • Federal Reserve Board

    • Congress

    Correct Answer
    A. Federal Reserve Board
    Explanation
    The Federal Reserve Board is responsible for the implementation of Monetary Theory. As the central bank of the United States, the Federal Reserve Board has the authority to control the money supply, set interest rates, and regulate banks. It formulates and executes monetary policy to achieve economic stability, promote growth, and control inflation. Through its decisions on interest rates and open market operations, the Federal Reserve Board influences the availability and cost of credit, which in turn affects economic activity and the overall health of the economy. Congress, on the other hand, has the power to create and pass laws related to the economy, but the implementation of monetary policy is primarily the responsibility of the Federal Reserve Board.

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  • 27. 

    ________ allows the issuer to redeem the bonds prior to maturity.

    • Call Feature

    • Put Feature

    Correct Answer
    A. Call Feature
    Explanation
    A call feature allows the issuer to redeem the bonds prior to maturity. This means that the issuer has the option to repay the bondholders before the stated maturity date. This feature provides flexibility to the issuer in case interest rates decrease or if the issuer wants to refinance the debt at a lower rate. By exercising the call feature, the issuer can save on interest payments and potentially reduce their overall borrowing costs.

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  • 28. 

    Google has an indenture under the trust indenture act of 1939, what else is true?

    • They are also subject to securities act of 1933

    • They are exempt from securities act of 1933

    Correct Answer
    A. They are also subject to securities act of 1933
    Explanation
    The correct answer is that Google is also subject to the Securities Act of 1933. This means that Google is required to comply with the regulations and disclosure requirements outlined in the act when issuing securities to the public. This ensures that investors are provided with all the necessary information to make informed investment decisions. Being subject to the Securities Act of 1933 demonstrates Google's commitment to transparency and accountability in its financial dealings.

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  • 29. 

    An options contract has intrinsic value if its

    • In the money

    • Out-of the money

    • At the money

    Correct Answer
    A. In the money
    Explanation
    An options contract has intrinsic value if it is "in the money". This means that the current price of the underlying asset is favorable for the option holder. In other words, if the option were to be exercised immediately, the holder would make a profit. The intrinsic value is the difference between the current price of the underlying asset and the strike price of the option. If the option is "out-of-the-money" or "at-the-money", it does not have any intrinsic value as exercising the option would not result in a profit for the holder.

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  • 30. 

    Which best describes Discount Rate

    • The only rate directly controlled by Fed

    • Extension of credit by broker-dealer

    • Amount of money a bank must maintain based on a percentage of deposits.

    Correct Answer
    A. The only rate directly controlled by Fed
    Explanation
    The correct answer is "The only rate directly controlled by Fed." This is because the discount rate is the interest rate at which banks can borrow money directly from the Federal Reserve. The Federal Reserve has the authority to set and change this rate in order to control the money supply and influence economic conditions.

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  • 31. 

    True or False An issuer cannot redeem its bonds for a certain amount of time because bondholders are backed by "Call Protection".

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The statement is true because "Call Protection" is a provision in bond agreements that prevents the issuer from redeeming or calling back the bonds for a specific period of time. This provision is put in place to protect bondholders, ensuring that they have a guaranteed income stream for a certain period. During this time, the issuer cannot redeem the bonds, even if they want to. This allows bondholders to have a sense of security and stability in their investment.

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  • 32. 

    The amount over par that an issuer must pay an investor for redeeming the security early is called,

    • Call discount

    • Call premium

    • Premium over par

    • Call feature

    Correct Answer
    A. Call premium
    Explanation
    The correct answer is "Call premium." When an issuer redeems a security early, they may be required to pay the investor an amount over par, which is known as the call premium. This is a compensation for the investor's loss of future interest payments and potential capital gains.

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  • 33. 

    Ms. jones owns a 5% bond, how much does she receive annually?

    • $5

    • $50

    • $500

    • $.50

    Correct Answer
    A. $50
    Explanation
    Ms. Jones receives $50 annually because she owns a 5% bond. The 5% indicates the interest rate on the bond, which is calculated as a percentage of the bond's face value. Since the face value is not provided in the question, we cannot determine the exact amount of the bond. However, we can conclude that Ms. Jones receives $50 annually based on the given options.

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  • 34. 

    To increase money supply and ease credit, the Federal Open Market Committee (FOMC) must:

    • Buy Securities from bankers or Repo causing deposits and reserves to increase

    • Sell securities or reverse Repo causing deposits and reserves to decrease

    Correct Answer
    A. Buy Securities from bankers or Repo causing deposits and reserves to increase
    Explanation
    To increase money supply and ease credit, the Federal Open Market Committee (FOMC) buys securities from bankers or engages in repurchase agreements (Repo). When the FOMC buys securities, it injects money into the banking system by increasing deposits and reserves. This increases the money supply and makes credit more readily available, as banks have more funds to lend out. Selling securities or engaging in reverse repurchase agreements (Repo) would have the opposite effect, decreasing deposits and reserves, and tightening credit conditions.

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  • 35. 

    When Pegging, you

    • Keep the price of a stock from rising

    • Keep the price of a stock from falling

    Correct Answer
    A. Keep the price of a stock from falling
    Explanation
    Pegging refers to the practice of keeping the price of a stock from falling. This can be done by placing buy orders or providing support at a certain price level, preventing the stock from declining further. The intention behind pegging is to stabilize the stock price and maintain investor confidence. By actively preventing the price from falling, pegging aims to create a floor or support level for the stock, ensuring that it does not experience significant downward movements.

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  • 36. 

    An options contract that gives the holder the right to sell a certain quantity at a specific price up to a certain date is known as a 

    • Call

    • Put

    • Right

    • Warrent

    Correct Answer
    A. Put
    Explanation
    A put option is a type of options contract that gives the holder the right to sell a certain quantity of an underlying asset at a specific price, known as the strike price, up to a certain date. This means that the holder of a put option can sell the asset at the strike price, even if the market price of the asset has fallen below the strike price. Therefore, the correct answer is put.

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  • 37. 

    Hotnews.com has issued convertible bonds with a conversion price of $50 a share. if the common stock is selling at $60 a share, what price does the bond need to be selling at in order for it to be at parity with common stock?

    • $20

    • $1,000

    • $1200

    • $1300

    Correct Answer
    A. $1200
    Explanation
    The bond needs to be selling at $1200 in order for it to be at parity with the common stock. This is because the conversion price is $50 a share, and if the common stock is selling at $60 a share, the bond needs to be priced at a higher value to make it attractive for investors to convert their bonds into common stock. At $1200, the bondholder would be able to convert their bond into 24 shares of common stock, which would be worth $1440 at the current stock price of $60 per share.

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  • 38. 

    Which CMO Tranche provides the most predictable cash flow and maturity?

    • Planned amortization class or PAC Tranche

    • Support or companion Tranche

    • Z-Tranche

    Correct Answer
    A. Planned amortization class or PAC Tranche
    Explanation
    The Planned Amortization Class (PAC) Tranche provides the most predictable cash flow and maturity. This is because PAC Tranches are structured in a way that prioritizes the timely repayment of principal and interest to investors. They are designed to absorb prepayment risk and provide a stable cash flow by redirecting prepayments to other tranches. This ensures that the PAC Tranche receives a predictable stream of cash flows, making it the most reliable option for investors in terms of cash flow and maturity.

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  • 39. 

    In November 2009, RST Corp. paid the principal on a maturing debenture from its retained earnings. how will this action be recorded on the 2009 cash flow. 

    • Financing Activity; source of cash

    • Financing Activity;use of cash

    • Investing Activity; Use of cash

    • Operating Activity; use of cash

    Correct Answer
    A. Financing Activity;use of cash
    Explanation
    The payment of the principal on a maturing debenture from retained earnings is considered a financing activity because it involves the repayment of a debt. It is recorded as a use of cash because the company is using its cash reserves to pay off the debenture.

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  • 40. 

    Which best describes the Securities exchange act of 1934?

    • Created by Finra, regulates bonds

    • Created by Finra, regulates secondary markets

    • Created by SEC, Regulates bonds

    • Created by SEC, Regulates secondary market

    Correct Answer
    A. Created by SEC, Regulates secondary market
    Explanation
    The correct answer is "Created by SEC, Regulates secondary market." The Securities Exchange Act of 1934 was enacted by the U.S. Congress and established the Securities and Exchange Commission (SEC) as the regulatory body for the securities industry. This act focuses on the regulation of secondary markets, which include stock exchanges and over-the-counter markets, where previously issued securities are traded among investors. It aims to ensure fair and transparent trading practices, protect investors, and maintain the integrity of the securities market.

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  • 41. 

    When a dividend is ________, the following occurs:1)current assets are reduced2)current liabilities are reduced3)working capital remains the same4)current ratio is increased (if greater than 1.0)

    • Dividend is Paid

    • Dividend is Declared

    Correct Answer
    A. Dividend is Paid
    Explanation
    When a dividend is paid, it means that the company has distributed a portion of its earnings to its shareholders. This distribution of earnings reduces the company's current assets, as cash is used to pay the dividend. It does not affect current liabilities or working capital, as these are not directly related to the payment of dividends. However, the payment of dividends can increase the company's current ratio (current assets divided by current liabilities) if the current ratio was already greater than 1.0, as the reduction in current assets would make the ratio higher.

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  • 42. 

    An issuer is looking to raise $100mm and issues 10 bonds with different coupons that mature at different times. This is an example of what type of bond?

    • Serial bond

    • Term Maturity Bond

    • Convertible Bond

    • Zero-Coupon bond

    Correct Answer
    A. Serial bond
    Explanation
    This is an example of a serial bond. A serial bond is a type of bond where multiple bonds with different maturity dates are issued at the same time. In this case, the issuer is looking to raise $100mm and issues 10 bonds with different coupons that mature at different times. Each bond will have its own maturity date and coupon rate, providing the issuer with flexibility in managing its debt obligations over time.

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  • 43. 

    From the List, which is an example of Long Term Liabilities on a Balance Sheet?

    • Land

    • Inventory

    • Accounts Payable

    • Notes

    • Retained Earnings

    Correct Answer
    A. Notes
    Explanation
    Notes are an example of long-term liabilities on a balance sheet because they represent debts or loans that are due to be repaid over a period of more than one year. Unlike accounts payable, which are short-term liabilities, notes are typically long-term financial obligations that extend beyond the current operating cycle of a business. Land, inventory, and retained earnings are not examples of long-term liabilities as they represent assets or equity on a balance sheet.

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  • 44. 

    True or false: the statement of Cash Flows (AKA statement of Sources AKA uses of Funds) reconciles changes in a company's cash position from one year to the next and is required in annual reports

    • False

    • True

    Correct Answer
    A. True
    Explanation
    The statement of cash flows reconciles changes in a company's cash position from one year to the next and is indeed required in annual reports. This financial statement provides information about the cash inflows and outflows of a company, categorizing them into operating, investing, and financing activities. It helps stakeholders understand how the company generates and uses its cash, providing insights into its liquidity and cash flow management.

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  • 45. 

    On april 6th 2010 google announces its going to begin trading its stock with dividends, this is known as:

    • Payment Date

    • Record Date

    • Declaration Date

    • Ex-dividend date

    Correct Answer
    A. Declaration Date
    Explanation
    The correct answer is "Declaration Date." This is the date on which Google officially announces its intention to begin trading its stock with dividends. It is an important date for shareholders as it marks the company's formal declaration of its dividend policy and signals the start of the dividend payment process.

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  • 46. 

    According to positive convexity, as yields decline

    • Prices decline as well

    • Prices Increase

    Correct Answer
    A. Prices Increase
    Explanation
    According to positive convexity, as yields decline, prices increase. This means that when interest rates go down, the prices of fixed-income securities such as bonds increase. This is because when yields decrease, the fixed interest payments of the bond become more attractive compared to other investments, driving up demand for the bond and pushing its price higher. Therefore, the correct answer is that prices increase.

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  • 47. 

    T-bills have a duration of

    • Up to one year

    • 2-10 years

    • Over 10 years

    Correct Answer
    A. Up to one year
    Explanation
    T-bills have a duration of up to one year because they are short-term debt instruments issued by the government to raise funds. They are typically issued with maturities of 4 weeks, 13 weeks, 26 weeks, or 52 weeks. As they have a shorter duration, they are considered to have lower interest rate risk compared to longer-term securities. Investors who are seeking a safe and liquid investment option for a shorter period of time often choose T-bills.

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  • 48. 

    True or False: A strong dollar will lower import prices and increase export prices.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    A strong dollar will lower import prices because it can buy more foreign currency, making imports cheaper. On the other hand, it will increase export prices because foreign buyers will need to exchange more of their currency to purchase goods and services denominated in a strong dollar. This makes exports relatively more expensive for them. Therefore, a strong dollar tends to result in lower import prices and higher export prices.

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  • 49. 

    What form would you use for the Registration of an IPO

    • Form 3

    • Form 4

    • Form S-3

    • Form S-1

    Correct Answer
    A. Form S-1
    Explanation
    Form S-1 is the correct answer because it is the form that companies must use to register their initial public offerings (IPOs) with the Securities and Exchange Commission (SEC) in the United States. This form provides detailed information about the company, its financials, management, and the proposed offering. It is a comprehensive document that helps investors make informed decisions about investing in the company's securities.

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Quiz Review Timeline (Updated): Mar 19, 2023 +

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  • Mar 19, 2023
    Quiz Edited by
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  • Apr 17, 2010
    Quiz Created by
    Needaquiz
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