Series 79 Financial Industry Regulatory Authority (Finra) Quiz

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

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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About This Quiz
Finance Quizzes & Trivia

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.

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2. 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?

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

Explanation

An officer, director, or owner of more than 10% of voting securities is considered an insider because they have access to confidential information about the company and can potentially use it for personal gain. As insiders, they have a legal obligation to disclose their transactions in the company's securities and are subject to certain restrictions and regulations to prevent insider trading.

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

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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5. Which best describes Reserve Requirement?

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

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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7. Which best describes front running?

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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8. An example of a fixed income investment is

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

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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10. 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?

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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11. 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?

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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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%?

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

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, 

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

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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16. When Capping, you

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

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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18. 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?

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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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:

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?

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

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

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

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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24. Who is responsible for the implementation of Monetary Theory?

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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25. Dividends are determined by

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

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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27. An options contract has intrinsic value if its

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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28. Which best describes Discount Rate

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

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

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

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,

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

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

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

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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36. 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. 

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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37. When Pegging, you

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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38. 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 

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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39. 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?

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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40. 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)

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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41. Which best describes the Securities exchange act of 1934?

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

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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43. 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

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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44. 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?

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

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

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

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.

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. To decrease money supply and tighten credit, the Federal Open Market Committee (FOMC) must:

Explanation

When the Federal Open Market Committee (FOMC) sells securities or engages in reverse repurchase agreements (reverse Repo), it essentially takes money out of the financial system. This action decreases the amount of deposits and reserves held by banks, which in turn decreases the money supply and tightens credit. By reducing the availability of money in the economy, the FOMC aims to control inflation and stabilize the economy.

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50. What form would you use for the Registration of an IPO

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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51. When a company first issues a Tender Offer than files for a short form Merger, its called

Explanation

A two-step merger refers to a process where a company first issues a tender offer to acquire the shares of another company, and then follows it up with a short-form merger. In this case, the company initiates the acquisition by making a public offer to purchase the target company's shares through a tender offer. Once a significant number of shares are acquired, the acquiring company can proceed with a short-form merger, which allows for the consolidation of the two companies without requiring a shareholder vote. This process is often used to expedite the merger and integration of the two companies.

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52. Short term investments offered to shareholders at a discount

Explanation

Rights are short-term investments offered to shareholders at a discount. When a company wants to raise additional capital, it may offer rights to its existing shareholders. These rights allow shareholders to purchase additional shares of the company's stock at a discounted price. This gives shareholders the opportunity to increase their ownership in the company at a lower cost. Warrants, on the other hand, are similar to rights but are typically long-term investments that give the holder the right to buy the company's stock at a specific price within a certain time frame.

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53. Long term investments offered at a premium

Explanation

Warrants are long-term investment options that are offered at a premium. They give the holder the right to buy a specific number of shares at a predetermined price within a certain period. Unlike rights, which are typically offered to existing shareholders, warrants are often sold to the general public. Warrants provide the opportunity for investors to profit if the price of the underlying stock increases above the predetermined price.

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54. Rob owns a convertible bond issued by tulip.com with a conversion price of $40. Tulip.com's stock is currently selling for $50 per share. Tulip calls in the bonds at 105 ($1050). What should he do?

Explanation

Rob should convert his convertible bond into stock. This is because the conversion price of the bond is lower than the current stock price of Tulip.com. By converting, Rob can acquire the stock at a lower price and potentially benefit from any future increase in the stock's value. Accepting the call-in price would mean selling the bond back to the company at $1050, which may not be as profitable as converting it into stock.

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55. How are T-bills quoted?

Explanation

T-bills are quoted on a discount yield basis, which means they are priced at a discount from their face value. This is because T-bills are short-term debt securities issued by the government with a maturity of one year or less. The discount yield is calculated by subtracting the purchase price of the T-bill from its face value and dividing the result by the face value. This yield represents the investor's return on investment and is expressed as an annual percentage rate. Therefore, the correct answer is "Discount Yield Basis."

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

Explanation

A weak dollar will increase import prices because it takes more dollars to purchase the same amount of foreign currency needed to buy imports. This makes imported goods more expensive for domestic consumers. On the other hand, a weak dollar will lower export prices because foreign buyers can purchase more goods with their stronger currency. This makes domestically produced goods more affordable and competitive in international markets. Therefore, the statement is true.

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57. If XYZ is offering an option to call at $110 and the market price is $109 it is

Explanation

The given scenario states that XYZ is offering an option to call at $110, but the market price is $109. In options trading, being "in the money" means that the market price is higher than the strike price, which is not the case here. "At the money" refers to a situation where the market price is equal to the strike price, which is also not applicable. Therefore, since the market price is lower than the strike price, it can be concluded that the option is "out of the money".

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58. True or False:when referring to stock splits and dividends
1) Retained earnings is debited for the market value of shares2)Common stock is credited for the par value of the shares3)Paid-in capital is credited for the difference
Hint: Memorize this Crap!

Explanation

When referring to stock splits and dividends, the correct answers are as follows: 1) Retained earnings is debited for the market value of shares. 2) Common stock is credited for the par value of the shares. 3) Paid-in capital is credited for the difference. This means that when a stock split or dividend occurs, the company's retained earnings account is reduced by the market value of the shares being distributed, common stock is credited for the par value of the shares, and any excess amount is credited to paid-in capital.

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59. Which of the following corporate actions would be considered dilutive to shareholders?1)stock split2)stock dividend3)a company issuing additional stock4)A conversion of convertible stock
Theres an explanation to this one.

Explanation

additional stock split (3) is immediately dilutive because they are adding stocks

convertible bonds is dilutive because eventually it will be converted to stocks

employee stock options are also dilutive because they create more stocks.

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60. When using (LIFO) for inventory, the last costs are matched with first units sold. The inventories reflect the cost of prior period purchases. what is true about using LIFO

Explanation

When using the LIFO (Last-In, First-Out) method for inventory, the last costs are matched with the first units sold. This means that the cost of the most recent inventory purchases is assigned to the goods sold first, resulting in a decrease in the value of inventory. As a consequence, the cost of goods sold will be higher, leading to a decrease in income. Since income is lower, taxes will also decrease. Therefore, the correct answer is that income, taxes, and inventory all decrease when using LIFO.

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61. Company J had Sales (revenue) of 250, Gross Profit of 110, Operating Profit of 46, and net income of 26 (all in millions), what is the profit margins (percentage) of Operating Profit

Explanation

The profit margin is calculated by dividing the operating profit by the sales revenue and multiplying by 100 to get the percentage. In this case, the operating profit is 46 million and the sales revenue is 250 million. Dividing 46 by 250 gives us 0.184, which when multiplied by 100 gives us 18.4%. Therefore, the profit margin of the operating profit is 18.4%.

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62. True or false, a man owns 6% share in google and his wife owns 4% share in google, They are insiders

Explanation

The statement is true because the man and his wife collectively own 10% of the shares in Google, which qualifies them as insiders. Insiders are individuals who have access to important non-public information about a company, such as its financial status or future plans, due to their ownership or employment within the company. The ownership percentage mentioned in the question indicates that the man and his wife have a significant stake in Google, making them insiders.

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63. The issuer has the ability to repurchase a stock, typically at a premium, what type of stock is this an example of?

Explanation

Callable stock is an example of a stock that the issuer has the ability to repurchase, typically at a premium. Callable stock gives the issuer the right to redeem or repurchase the stock from the shareholder at a predetermined price within a specified period of time. This allows the issuer to take advantage of favorable market conditions or to adjust its capital structure.

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64. ___________allows bondholders to redeem the bond back to the issuer on a date prior to stated maturity. 

Explanation

The correct answer is Put Feature. A put feature allows bondholders to redeem the bond back to the issuer before the stated maturity date. This feature gives bondholders the option to sell the bond back to the issuer at a predetermined price, providing them with flexibility and an exit strategy if they no longer wish to hold the bond.

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65. If a bond was previously rated AA and dropped two notches, what is the bonds new rating?

Explanation

If a bond was previously rated AA and dropped two notches, the bond's new rating would be A+. The ratings for bonds typically range from AAA (highest rating) to D (default). Dropping two notches from AA would result in a rating of A+. This indicates a slightly lower creditworthiness compared to the previous AA rating, but still represents a relatively high level of credit quality.

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66. T-bonds have a duration of

Explanation

T-bonds have a duration of more than 10 years. This means that the bonds have a longer maturity period, typically exceeding a decade. T-bonds are long-term debt securities issued by the US government to finance its operations and projects. They offer a fixed interest rate and are considered to be a safe investment option. Investors who are seeking stable returns over an extended period often choose T-bonds due to their longer duration.

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67. Which tranche is the last to receive payments?

Explanation

The Z-Tranche is the last to receive payments because it is a type of tranche that does not receive any principal payments until all the other tranches have been fully paid off. Instead, the interest payments that would have gone to the Z-Tranche are used to pay down the principal of the other tranches. Once all the other tranches have been paid off, the Z-Tranche starts receiving principal payments. This makes it the last tranche to receive payments.

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68. What is the close out of an opening sale

Explanation

The close out of an opening sale refers to the action of closing or terminating the initial transaction by purchasing the same security or asset that was initially sold. This is known as a closing purchase. It allows the investor to offset their position and effectively exit the trade. By buying back the same security, the investor is closing the sale and ending their involvement in the trade.

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69. Which contract is the most liquid?

Explanation

The most liquid contract is the Futures Contract. This is because futures contracts are standardized and traded on organized exchanges, which provide a centralized marketplace for buyers and sellers. The standardized nature of futures contracts allows for easy buying and selling, attracting a large number of participants. Additionally, futures contracts have high trading volumes and tight bid-ask spreads, making them highly liquid compared to other types of contracts such as forward contracts.

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70. True or false, Aggressive accounting use discount rates in calculating pension fund liabilities.

Explanation

Aggressive accounting refers to the practice of manipulating financial statements to make a company's financial performance appear better than it actually is. Using discount rates in calculating pension fund liabilities is one way of manipulating the numbers to reduce the reported liabilities. By using higher discount rates, the present value of future pension obligations can be reduced, resulting in lower reported liabilities and potentially higher reported profits. Therefore, it can be inferred that aggressive accounting does indeed use discount rates in calculating pension fund liabilities.

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71. True or False: The Patriot act backs CIP? 

Explanation

The Patriot Act does support CIP (Critical Infrastructure Protection). This act was enacted in response to the 9/11 terrorist attacks in the United States and it grants the government increased powers to monitor and protect critical infrastructure, such as power plants, transportation systems, and communication networks, from potential threats. The act allows for enhanced surveillance and information sharing between government agencies to prevent and respond to any potential attacks on critical infrastructure.

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72. True or False. John bought made a TO with Google, He is allowed to continue trading Google's stock.

Explanation

John made a TO (Takeover) with Google, which means he acquired ownership or control of the company. However, this does not necessarily mean that he is allowed to continue trading Google's stock. The terms of the takeover agreement may restrict or limit his ability to trade the stock. Therefore, the statement is false.

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73. What is the close out of an opening purchase

Explanation

The close out of an opening purchase refers to the action of closing or selling the previously purchased position. In other words, it is the process of selling the securities or assets that were initially bought. Therefore, the correct answer is "closing sale."

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74. When investing in other companies, Consolidation is used when ownership interest is more than

Explanation

Consolidation is used when the ownership interest in another company exceeds 50%. This means that if an investor acquires more than 50% ownership in another company, they have control over that company's operations and financial decisions. Consolidation allows the investor to combine the financial statements of both companies and report them as a single entity. It signifies a significant level of influence and control over the invested company, making it necessary to consolidate the financial statements for a more accurate representation of the overall financial position and performance.

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75. Jakey has 1,000 shares in google. Google decides that this year everyone will have cumulative voting rights. They are voting for 5 directors. How many votes does Jakey have?

Explanation

Jakey has 1,000 shares in Google, and with cumulative voting rights, he can cast all his votes for a single candidate or distribute them among multiple candidates. Since there are 5 directors being voted for, Jakey can cast 1,000 votes for each director, resulting in a total of 5,000 votes.

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76. Which bonds are issued outside the us, pay in US currency, exempt from SEC and may trade in secondary market after 40 days?

Explanation

Eurodollar bonds are issued outside the US, denominated in US currency, exempt from SEC regulations, and can be traded in the secondary market after 40 days. These bonds are typically issued by non-US entities and are attractive to investors seeking exposure to US currency without being subject to US regulations. They provide an opportunity for issuers to raise funds in US dollars from international investors.

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77. T-notes have a duration of 

Explanation

T-notes have a duration of 2-10 years. This means that the time it takes for the investor to receive the full principal amount of the T-note, including interest, is between 2 and 10 years. T-notes are medium-term debt securities issued by the US government, and they offer a fixed interest rate and regular interest payments to the investor. The range of 2-10 years allows investors to choose a T-note that aligns with their desired investment timeframe and risk tolerance.

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78. RYX Waste Developement has increased its ownership of JV Recyclers from 49% to 51%. What changes would be expected on the RYX balance sheet?

Explanation

When RYX Waste Development increases its ownership of JV Recyclers, it means that RYX now has more control and ownership over the assets, liabilities, and equity of JV Recyclers. As a result, these components would increase on RYX's balance sheet. The increase in ownership would lead to an increase in the assets of RYX, as they now have a larger share of the assets of JV Recyclers. Similarly, the liabilities and equity would also increase, reflecting RYX's increased responsibility and ownership in the joint venture.

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79. When quoting a yield, how much does 1% represent?

Explanation

In the context of quoting a yield, 1% represents 100 basic points. This means that for every 1% change in yield, there will be a corresponding change of 100 basic points. Basic points are commonly used in finance to measure small changes in interest rates or yields. Therefore, when quoting a yield, 1% is equivalent to 100 basic points.

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80. A CMO (Collateralized Mortgage Obligations) is a mortgage backed bond created by dividing mortgage pools into various bond classes (tranches), they are rated AAA and issue $1,000 denominations, interest is paid monthly, principle paid sequentially, and helps to manage pre-payment risk. All of the following are divided into Tranches except:

Explanation

The correct answer is SLMA - student loan marketing association. While CMOs are mortgage-backed bonds created by dividing mortgage pools into various bond classes, SLMA is not related to mortgages. SLMA, also known as Sallie Mae, is a government-sponsored entity that deals with student loans. Therefore, it is not divided into tranches like the other options listed.

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81. Keynesian theory, has a fiscal policy that utilizes _________ to accomplish its goals?

Explanation

Keynesian theory is an economic theory that suggests that government intervention through fiscal policy can help stabilize the economy. In order to accomplish its goals, Keynesian theory utilizes taxes and expenditures. By adjusting tax rates and government spending, the theory aims to stimulate or slow down economic activity to achieve full employment and stabilize prices. This approach emphasizes the role of government in managing aggregate demand and influencing economic growth.

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82. Average Workweek, Initial Claims for unemployment, New orders for consumer goods and materials, money supply (m2), index of consumer expectations and interest rate spread are all examples of

Explanation

The given answer, "Leading Economic Indicators," is correct because the indicators listed - Average Workweek, Initial Claims for unemployment, New orders for consumer goods and materials, money supply (m2), index of consumer expectations, and interest rate spread - are all used to predict and anticipate future changes in the economy. These indicators tend to change before the overall economy does, making them useful for forecasting economic trends and potential changes in business activity. Therefore, they are considered leading indicators.

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83. Company J had Sales (revenue) of 250, Gross Profit of 110, Operating Profit of 46, and net income of 26 (all in millions), what is the profit margins (percentage) of gross profit

Explanation

The profit margin is calculated by dividing the gross profit by the sales revenue and multiplying by 100 to get the percentage. In this case, the gross profit is 110 and the sales revenue is 250. Therefore, the profit margin is (110/250) * 100 = 44%.

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84. Under CIP, you must check the name of a foreign client against which list

Explanation

Under CIP (Customer Identification Program), it is necessary to verify the identity of foreign clients. In order to comply with regulations, the name of the foreign client must be checked against the OFAC (Office of Foreign Assets Control) list. OFAC maintains a list of individuals and organizations that are prohibited from doing business with US entities due to their involvement in illegal activities or posing a threat to national security. Therefore, checking the name against the OFAC list helps ensure compliance with legal requirements and prevents engaging in transactions with sanctioned individuals or entities.

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85. Stock appreciation rights (SARs) are issued by who and benefit who by providing the right to receive the difference between market value and fixed price

Explanation

Stock appreciation rights (SARs) are a form of employee compensation that are issued by the company. These rights provide employees with the opportunity to receive the difference between the market value and a fixed price of the company's stock. By issuing SARs, the company benefits its employees by giving them the potential to profit from the increase in the company's stock price. This can serve as a form of incentive and motivation for employees to contribute to the company's success.

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86. If an ADR is sponsored, who pays for it?

Explanation

When an ADR (American Depositary Receipt) is sponsored, it means that the issuer of the underlying foreign security has taken the responsibility to establish and administer the ADR program. As a result, the issuer is the one who pays for it. The issuer incurs the costs associated with setting up the ADR program, including legal, administrative, and marketing expenses. The issuer also pays for ongoing expenses such as maintaining the ADR program, distributing dividends, and communicating with ADR holders. Therefore, it is the issuer who bears the financial responsibility for a sponsored ADR.

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87. What is the waiting period for unsuccessful attempts on the series 79

Explanation

The waiting period for unsuccessful attempts on the series 79 is 30 days after the 1st and 2nd attempt, and then 180 days every time after. This means that if someone fails the exam for the first or second time, they must wait 30 days before attempting it again. However, if they fail the exam for the third time or any subsequent attempts, they must wait 180 days before being able to retake it.

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88. Anyone who acquired 5% or more of equity must file

Explanation

Schedule 13D is a required filing with the Securities and Exchange Commission (SEC) for any individual or group that acquires 5% or more of a company's equity. This filing is necessary to provide transparency and ensure that investors are aware of significant ownership changes that could potentially impact the company's operations or stock price. The other options listed, such as 14D-9, 13a-11, and 10b-5, are not specifically related to the requirement for filing when acquiring 5% or more of equity.

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89. What best Describes Regulation T

Explanation

Regulation T is a rule implemented by the Federal Reserve that governs the extension of credit by broker-dealers. It sets the requirements and limitations for margin accounts, which allow investors to borrow money to purchase securities. This regulation helps to ensure the stability and integrity of the financial system by controlling the amount of credit extended and preventing excessive speculation.

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90. When using FIFO for inventory, (First in, First out) the first are costs matched with first units sold, inventories reflect the cost of the most recent purchase. What is true about FIFO

Explanation

In FIFO (First in, First out) method, the costs of the first units purchased are matched with the first units sold. This means that as the most recent purchases are still in inventory, the older, lower-cost items are being sold. As a result, the cost of goods sold is lower, leading to higher income. Higher income can result in higher taxes. Additionally, since the most recent purchases are still in inventory, the value of inventory also increases. Therefore, the correct answer is that income, taxes, and inventory rise when using FIFO.

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91. How often are customer complaints files and with who?

Explanation

The correct answer is "Finra Quarterly." This means that customer complaints files are filed every quarter with Finra. Finra is a regulatory organization that oversees brokerage firms and exchange markets in the United States. Filing complaints regularly allows for timely resolution and monitoring of any issues or misconduct in the industry. The frequency of quarterly filing ensures that customer complaints are addressed promptly and efficiently.

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92. If GM is offering a put valued at $60 and the market price is $54 it is

Explanation

In options trading, when the market price of the underlying asset is higher than the strike price of a put option, it is considered "in the money". In this case, the market price of $54 is lower than the strike price of $60, indicating that the put option has intrinsic value and can be exercised for a profit. Therefore, the correct answer is "in the money".

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93. Peter knows company A needs to buy 100 units of a product.petere tells the company to buy 200 units and bring back whatever is left over for a return after a certain date so that it makes his numbers look good. What is this an example of?
P.S. this is faud

Explanation

This scenario is an example of channel stuffing. Channel stuffing occurs when a company artificially inflates its sales figures by encouraging its customers to purchase more products than they actually need. In this case, Peter is advising Company A to buy 200 units instead of the required 100 units, with the intention of returning the excess units later. This deceptive practice makes the company's sales numbers appear higher than they actually are, which can mislead investors and stakeholders.

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94. How often does one take the regulatory element?

Explanation

One takes the regulatory element 2 years after registration, and then every 3 years after that. This means that initially, the regulatory element is taken 2 years after registration. After that, it is taken every 3 years, meaning that there is a 3-year gap between each subsequent regulatory element.

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95. True or false: If you work in public finance, you are considered a RR

Explanation

The statement "If you work in public finance, you are considered a RR" is false. Public finance refers to the management of a government's revenue, expenses, and debt. While working in public finance may involve dealing with financial matters, it does not automatically make someone a Registered Representative (RR). An RR typically refers to a licensed professional who is authorized to buy and sell securities on behalf of clients. Therefore, the correct answer is false.

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96. Jakey has 1,000 shares in google. Google decides that this year everyone will have statutory voting rights. They are voting for 5 directors. How many votes does Jakey have?

Explanation

Jakey has 1,000 shares in Google, and since Google has decided that this year everyone will have statutory voting rights, Jakey will have one vote per share. Therefore, Jakey will have 1,000 votes in total.

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97. Typically, a higher yield bond costs

Explanation

Typically, a higher yield bond costs less. This is because the yield on a bond is the return an investor receives from holding the bond, usually expressed as a percentage of the bond's face value. Higher yield bonds offer a higher return to compensate for their higher risk. Investors are willing to accept a lower purchase price for these bonds in order to achieve a higher yield. Therefore, the cost of a higher yield bond is generally lower than that of a lower yield bond.

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98. The following are all derivatives except

Explanation

The given answer is incorrect. The question states that "the following are all derivatives except," which implies that one of the options listed is not a derivative. However, the answer provided states that all the options are derivatives, which contradicts the question. Therefore, the correct answer cannot be determined based on the given information.

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99. RFQ corporation reported net income of $30mm which included a one-time, pretax gain of $20mm from the sale of assets. The company's tax rate is 40%. Assuming no substantial changes in the company's operations for the next period, what is your forecast for the next periods income?

Explanation

The net income reported by RFQ corporation includes a one-time, pretax gain of $20mm from the sale of assets. Since this gain is pretax, it is not subject to taxation. Therefore, the $20mm gain will not be reduced by the tax rate of 40%. Thus, the next period's income is expected to be the same as the reported net income of $30mm minus the one-time gain of $20mm, which gives a forecasted income of $18mm.

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100. Which best describes OSJ?

Explanation

The correct answer is "all of the above" because OSJ (Office of Supervisory Jurisdiction) is responsible for structures public offers, signs off on company literature, and structures private placements. This means that OSJ oversees and approves various aspects related to public offers, company literature, and private placements.

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101. If GM on june is offering an option price of $35 to call at 3 and the market price is $36, it is

Explanation

In this scenario, the option price offered by GM is $35, which is lower than the market price of $36. When the option price is lower than the market price, it indicates that the option has intrinsic value. This means that if the option is exercised, the investor will be able to buy the underlying asset (in this case, GM stock) at a lower price than the current market price. Therefore, the option is considered "in the money."

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102. An investor may receive additional dividends based on company profits, this is an example of what type of stock?

Explanation

In the given question, the correct answer is "participating stock". Participating stock is a type of stock where the investor has the right to receive additional dividends based on the company's profits. This means that if the company performs well and earns higher profits, the investor will receive additional dividends on top of the regular dividends. It allows the investor to participate in the company's success and share in the profits.

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103. Companies exceeding $10mm and more than 500 shareholders must register and file

Explanation

Companies exceeding $10mm in assets and more than 500 shareholders are required to register and file the 10k and 10Q forms. The 10k form is an annual report that provides a comprehensive overview of the company's financial performance, management discussion and analysis, and other relevant information. The 10Q form is a quarterly report that provides updates on the company's financial condition and results of operations. These filings are important for transparency and accountability, allowing investors and the public to make informed decisions about the company.

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104. ______________ are foreign securities held in a us bank located in a foreign country. Typically provide common shares that pay dividends in us currency and can be either sponsored or not sponsored. 

Explanation

American Depository Receipts (ADRs) are foreign securities held in a US bank located in a foreign country. ADRs typically provide common shares that pay dividends in US currency and can be either sponsored or not sponsored. ADRs allow US investors to invest in foreign companies without having to directly purchase the foreign company's shares. They provide an easier way for US investors to access international investment opportunities and receive dividends in US currency.

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105. The par value of a bond is $1,000. The interest of a bond pays 1 point. how much interest is received?

Explanation

The par value of a bond is $1,000, which means that the bond is worth $1,000. The interest of the bond pays 1 point, which means that it pays 1% of the par value. Therefore, the interest received would be 1% of $1,000, which is $10.00.

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106. Which bond is a foreign bond that is issued in the united states, pays interest & principle in us dollars, registered with the SEC and may trade immediately.

Explanation

A Yankee Bond is a foreign bond that is issued in the United States, pays interest and principal in US dollars, and is registered with the SEC. It is called a Yankee Bond because it is issued by foreign entities in the US market. This type of bond allows foreign issuers to access the US capital markets and raise funds in US dollars. Yankee Bonds are also typically liquid and can trade immediately, providing investors with the ability to buy or sell them easily.

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107. If John makes a tender offer which causes him to own 6% of the share what must he file

Explanation

When an individual makes a tender offer and acquires 6% of the shares, they are required to file Schedule TO. Schedule TO is a form that must be filed with the Securities and Exchange Commission (SEC) to disclose the tender offer and provide relevant information to shareholders. In addition to Schedule TO, the individual must also file Schedule 13d-9. Schedule 13d-9 is a form that must be filed when there are certain changes in the ownership of a company's securities. Therefore, in this scenario, John must file Schedule TO in addition to Schedule 13d-9.

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108. True or false, balance sheet indicates a Minority Interest in net earnings of the consolidated companies
(minority interest AKA non controlling interest AKA NCI)

Explanation

The balance sheet does indicate a Minority Interest in the net earnings of consolidated companies. Minority interest, also known as non-controlling interest (NCI), refers to the portion of a subsidiary's net earnings that is not owned by the parent company. It represents the ownership interest held by external shareholders in the subsidiary. The balance sheet provides information about the assets, liabilities, and equity of a company, including any minority interest in the net earnings of consolidated companies. Therefore, the statement "True" is correct.

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109. What are the penalties for an individual who commits a criminal crime and who regulates it?

Explanation

The correct answer is "up to $5m and 20 years in jail regulated by DOJ." This means that an individual who commits a criminal crime can face penalties of up to $5 million in fines and up to 20 years of imprisonment, which are regulated by the Department of Justice (DOJ). The Securities and Exchange Commission (SEC) is responsible for imposing penalties of up to $25 million in fines, and individuals may also be required to give up their profits and pay up to three times the amount of their profits. However, this is not the penalty mentioned in the correct answer.

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110. If you notice a foreign country such as syria or north korea attempting to do business, what action must be taken.

Explanation

If a foreign country, such as Syria or North Korea, is observed attempting to do business, the appropriate action to be taken is to block any transactions with them and report the incident to the Office of Foreign Assets Control (OFAC) within 10 days. This is necessary to comply with international sanctions and prevent any potential illegal activities or support to sanctioned countries.

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111. After receiving notice, how long do you have to complete your regulatory element?

Explanation

After receiving notice, individuals have 120 days to complete their regulatory element. This time frame allows them to fulfill any required training or education related to regulatory compliance within a reasonable period. It ensures that individuals stay updated and knowledgeable about the regulations applicable to their field or profession. A shorter time frame might be too restrictive, while a longer one might delay the process unnecessarily. Thus, 120 days strikes a balance between providing sufficient time and maintaining efficiency.

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112. How often is AML Tested?

Explanation

AML stands for Anti-Money Laundering. It is a set of regulations and procedures that financial institutions must follow to detect and prevent money laundering and terrorist financing activities. AML testing refers to the process of assessing the effectiveness of these measures. The correct answer, annually, suggests that AML testing is conducted once a year. This allows financial institutions to evaluate their AML controls, identify any weaknesses or gaps, and make necessary improvements to ensure compliance with AML regulations. By conducting annual AML testing, institutions can stay vigilant in their efforts to combat money laundering and protect the integrity of the financial system.

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113. Trading securities outside the regular scope of employement is regulated by Finra, as well as the approval of a member. Another word for this is:

Explanation

Selling away refers to the practice of a securities professional engaging in securities transactions outside the scope of their employment with a member firm, without the approval or knowledge of the firm. This activity is regulated by Finra, the Financial Industry Regulatory Authority, to ensure that investors are protected and that securities professionals are acting in the best interest of their clients.

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114. If one wanted to use a form to find out everything they needed to know about a merger, what form would they use?

Explanation

Form S-4 is the correct answer because it is the form used for registering securities issued in connection with a business combination, such as a merger. This form provides detailed information about the merger, including financial statements, pro forma financial information, and other relevant details. It is required by the Securities and Exchange Commission (SEC) and provides investors with the necessary information to make informed decisions about the merger.

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115. Which Mortgage is Fully Backed by the US Government

Explanation

GNMA stands for Government National Mortgage Association, also known as Ginnie Mae. Ginnie Mae is a government-owned corporation that guarantees mortgage-backed securities (MBS) backed by federally insured or guaranteed loans, such as FHA and VA loans. This means that if a borrower defaults on their mortgage, Ginnie Mae will step in and ensure that investors in the MBS are paid. In contrast, FNMA (Fannie Mae), FHLMC (Freddie Mac), SLMA (Sallie Mae), and FFCB (Farm Credit Banks) are not fully backed by the US government and operate under different structures and regulations.

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116. The calculation for market Capitalization (outstanding shares x market value per share) can be used to calculate Market Capitalization (Large Cap vs Nano cap) except when trying to calculate:

Explanation

The calculation for market capitalization, which is the product of outstanding shares and market value per share, is commonly used to determine the market capitalization of a company. However, when trying to calculate the market capitalization, treasury stock should not be included in the calculation. Treasury stock refers to the shares of a company's own stock that it has repurchased from the open market, and these shares are not considered to be outstanding. Therefore, including treasury stock in the calculation would result in an inaccurate market capitalization figure.

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117. If a firm uses accelerated depreciation for tax reporting and straight line for GAAP reporting to shareholders, what is the effect on earnings during the early years?1)Creates lower earnings reported for tax purposes2)creates high earnings reported for tax purposes3)Increases deferred tax liability 4)Decreases deferred tax liability

Explanation

The use of accelerated depreciation for tax reporting creates lower earnings reported for tax purposes because it allows the firm to deduct a larger portion of the asset's cost in the early years, reducing taxable income. This, in turn, increases the deferred tax liability because the firm will have to pay higher taxes in the future when the asset's book value is lower than its tax basis. Therefore, the correct answer is 1 and 3 only.

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118. You are a RR, your father in law asks you for money, he is your client. Are you violating any laws?

Explanation

No, you are not violating any laws. As a RR (Registered Representative), you have a professional relationship with your father-in-law who is also your client. If he asks you for money, it is a personal matter and not a violation of any laws. However, it is important to handle such situations with caution and maintain professional boundaries to avoid any conflicts of interest or ethical concerns.

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119. When referring to GNMA, FNMA, FHLMC, what is true about interest payments

Explanation

The correct answer is "Interest portion only is fully taxed." This means that when referring to GNMA, FNMA, and FHLMC, only the interest payments are subject to taxation. The principle amount is not taxed.

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120. Client XYZ wants to share his losses and profits with you, is it possible?

Explanation

It is possible for Client XYZ to share his losses and profits with you, but only if you have a joint account. A joint account allows for the pooling of funds and the sharing of financial gains and losses between account holders. Without a joint account, it would not be possible to share losses and profits.

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121. Which US Treasuries have the characteristics described below1)interest is stated annually, paid semi-annually2)Accrued interest 365 days

Explanation

US T Bonds and T Notes are the only US Treasuries that have the characteristics described. T Bills do not pay interest semi-annually, and all of the above would include T Bills. Therefore, the correct answer is only A and C.

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122. Average duration of employment, prime rate, CPI for services, labor cost per unit, commercial and industrial loans are all an example of

Explanation

Lagging economic indicators are variables that change after the economy has already started to shift. In this case, average duration of employment, prime rate, CPI for services, labor cost per unit, and commercial and industrial loans are all examples of lagging economic indicators because they tend to reflect changes that have already occurred in the economy. These indicators are useful for analyzing past trends and confirming the direction of the economy, but they are not as helpful in predicting future economic changes.

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123. When investing in other companies, the equity method is used if ownership interest is ___________of the company

Explanation

The equity method is used when an investor has significant influence over the investee company, but does not have control. This typically occurs when the investor owns between 20% and 50% of the investee company's voting stock. With this level of ownership, the investor has the ability to exert influence over the investee's financial and operating policies, but does not have control over the investee's decision-making process. Therefore, the equity method is the appropriate accounting treatment for investments within this ownership range.

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124. An OSJ, must be supervised by an

Explanation

An OSJ (Office of Supervisory Jurisdiction) must be supervised by a Principle. A Principle is an individual who has the authority and responsibility to supervise and control the activities of the OSJ. They are typically high-level executives or managers within the organization who oversee the compliance and regulatory aspects of the business. The Principle ensures that the OSJ operates in accordance with industry regulations and guidelines, and they hold ultimate responsibility for the actions and conduct of the OSJ.

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125. How often are 10Qs Filed a year?

Explanation

10Qs, also known as quarterly reports, are filed by companies with the Securities and Exchange Commission (SEC) in the United States. These reports provide a summary of a company's financial performance and activities during a specific quarter. As per the answer given, 10Qs are filed three times a year, indicating that companies submit these reports every quarter.

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126. How long does the terminating company have to submit a u-5?

Explanation

The terminating company has 30 days to submit a u-5. This is a standard requirement for companies when an employee is terminated. The u-5 form is used to report the termination to regulatory authorities and includes information about the reason for termination and any disciplinary actions taken. It is important for the company to submit this form within the specified timeframe to ensure compliance with regulations and to provide accurate and timely information about the termination.

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127. Tulips.com issues a convertible bond with a conversion price of $25 per share. If the current market price of the bond is 120 ($1,200), what would the stock have to be selling at to be at parity with the bond.

Explanation

If the current market price of the bond is $1200 and the conversion price is $25 per share, then the stock would have to be selling at $30 to be at parity with the bond. This is because the conversion price is the price at which the bond can be converted into stock. If the stock is selling at a higher price than the conversion price, it would be more beneficial for the bondholder to convert the bond into stock and sell it at the higher market price. Therefore, for the stock and bond to be at parity, the stock price should be equal to the conversion price.

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128. True or False: Operating lease shows up on your balance sheet

Explanation

Operating lease does not show up on the balance sheet. Operating leases are considered off-balance sheet financing, where the leased asset and associated liability are not recorded on the balance sheet. Instead, the lease payments are recognized as an expense in the income statement over the lease term. This allows companies to keep their debt levels lower and improve their financial ratios. The correct answer is False.

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129. True or False: balance sheet and income statements are combined when using consolidation method

Explanation

When using the consolidation method, the balance sheet and income statements of multiple companies are combined to create a single, consolidated financial statement. This is done to reflect the financial position and performance of a group of companies as if they were a single entity. The consolidation method is commonly used when a company has subsidiaries or when it has controlling interest in other companies. By combining the balance sheet and income statements, the consolidated financial statement provides a comprehensive view of the group's financial activities and results.

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130. When a dividend is ______, the following occurs:1)retained earnings are reduced2)current liabilities are increased3)working capital is decreased4)current ratio is decreased

Explanation

When a dividend is declared, it means that the company has announced its intention to distribute a portion of its profits to its shareholders. This decision leads to a reduction in retained earnings, as the company sets aside funds to pay out dividends. Additionally, the declaration of a dividend does not have an immediate impact on current liabilities or working capital. However, it does decrease the current ratio, which is a measure of a company's ability to cover its short-term obligations with its current assets.

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131. True or False: if you work for the DPP you are considered a Registered Rep

Explanation

Working for the DPP (District Public Prosecutor) does not automatically make someone a Registered Rep (Registered Representative). The DPP is a legal position within the legal system, while being a Registered Rep typically refers to individuals who are licensed to sell securities and work in the financial industry, such as stockbrokers or investment advisors. Therefore, the statement is false.

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132. Who is responsible for the implementation of Keynesian Theory?

Explanation

Congress is responsible for the implementation of Keynesian Theory. This is because Keynesian Theory emphasizes government intervention in the economy to stabilize it during economic downturns. Congress, as the legislative branch of the United States government, has the power to pass laws and allocate funds for various economic policies and measures. Therefore, it is Congress that has the authority to implement Keynesian policies such as fiscal stimulus packages, government spending, and taxation policies to stimulate economic growth and stabilize the economy.

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133. A change in statements, projections on revenue or expenses or a change to historical documents are called: 

Explanation

Pro-forma statements refer to financial statements that are based on hypothetical scenarios or assumptions. These statements are used to project the potential impact of changes in statements, projections on revenue or expenses, or modifications to historical documents. They provide a way for businesses to estimate the financial outcomes of certain events or decisions before they occur, allowing for better planning and decision-making. Therefore, pro-forma statements are the appropriate term for this type of analysis.

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134. Annual filings covering transactions such as gifts are filed under which form?

Explanation

Annual filings covering transactions such as gifts are filed under Form 5. This form is filed on an annual basis, meaning it is submitted once every year. It is important to file this form to disclose any transactions related to gifts.

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135. Which is the correct order of the dividend dates?

Explanation

The correct order of the dividend dates is as follows: first, the declaration date is when the company announces the dividend; second, the ex-dividend date is the date that determines which shareholders are eligible to receive the dividend; third, the record date is the date when the company checks its records to identify shareholders who will receive the dividend; and finally, the payment date is when the dividend is actually paid to eligible shareholders.

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136. Which US security(s) can be stripped? (coupon payments and principles sold separately as zero coupon securities, each discounted)

Explanation

The correct answer is "only B and C." T-bills, T-notes, and T-bonds are all US securities that can be stripped. Stripping refers to separating the coupon payments and principal of a security and selling them separately as zero coupon securities, each discounted. Therefore, only T-notes and T-bonds can be stripped, while T-bills cannot.

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137. Industrial Production, Manufacturing and trade sales, personal income less transfer payments, employees on nonagricultural payrolls are all an example of

Explanation

Coincident Economic Indicators are measures that change at the same time as the overall economy. They provide real-time information about the current state of the economy. Industrial Production, Manufacturing and trade sales, personal income less transfer payments, and employees on nonagricultural payrolls are all examples of coincident economic indicators because they directly reflect the current level of economic activity. These indicators are used to assess the current health and direction of the economy, providing insights into its overall performance.

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138. A Stronger Foreign Currency will have

Explanation

A stronger foreign currency will have a positive effect on overseas investments because it increases the purchasing power of the currency in the foreign market. This means that investors can acquire more assets or goods for the same amount of money, leading to potentially higher returns on their investments. Additionally, a stronger currency can also attract foreign investors, as it indicates stability and confidence in the country's economy, further boosting overseas investments.

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139. How long do you have for the transgression of a felony or misdemeanor?

Explanation

The transgression of a felony or misdemeanor can be prosecuted within a certain time frame known as the statute of limitations. In this case, the correct answer is 10 years, meaning that legal action can be taken against the offender within a period of 10 years from the time the crime was committed. After this time has passed, the prosecution is generally barred from pursuing charges against the individual.

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140. When making a TO, how long does the subject company have to notify and advise shareholders?

Explanation

When making a TO (takeover offer), the subject company is required to notify and advise shareholders within 10 business days. This means that once the company decides to make a takeover offer, they have a maximum of 10 business days to inform and provide guidance to their shareholders. This timeframe ensures that shareholders are promptly informed about the offer and have sufficient time to make informed decisions regarding their shares.

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141. Can a GDR be offered in the united states

Explanation

The correct answer is "Yes, it will be considered an ADR." This is because GDRs (Global Depositary Receipts) are typically issued outside of the United States, while ADRs (American Depositary Receipts) are issued specifically for the United States market. Therefore, if a GDR is offered in the United States, it will be considered an ADR.

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142. Assume an issuer calls in a bond, where does he get money to repay his investors?

Explanation

The issuer can get money to repay his investors from both a sinking fund and a refunding issue. A sinking fund is a fund set up by the issuer specifically for the purpose of repaying bondholders when the bonds are called in. A refunding issue refers to the issuance of new bonds to raise money for the repayment of existing bonds. By using both a sinking fund and a refunding issue, the issuer can ensure that he has enough funds to repay his investors.

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143. Who are options created by?

Explanation

Options are created by the O.C.C (Options Clearing Corporation). The O.C.C is responsible for standardizing and guaranteeing the performance of options contracts. They create options by establishing the terms and conditions of each contract, including the strike price, expiration date, and underlying asset. The O.C.C also acts as the central counterparty for all options trades, ensuring that the obligations of buyers and sellers are fulfilled.

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144. Institutional investment managers file what form quarterly?

Explanation

Institutional investment managers file Form 13F quarterly. This form is required by the Securities and Exchange Commission (SEC) and is used to report their holdings of publicly traded securities. Form 13F provides important information about the investment manager's portfolio, including the types of securities held, the number of shares or contracts held, and the market value of those holdings. This information is made available to the public and helps investors, analysts, and regulators understand the investment activities of institutional managers.

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145. US Treasuries are exempt from

Explanation

US Treasuries are exempt from state and local taxes. This means that investors who hold US Treasuries do not have to pay state or local taxes on the interest income they earn from these securities. However, US Treasuries are still subject to federal taxes, so investors will have to pay federal taxes on the interest income they earn from these securities. Therefore, the correct answer is "Only A and B."

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146. A u-5 must be submitted within

Explanation

A u-5 must be submitted within 30 days. This means that there is a deadline of 30 days to submit the u-5 form. It is important to submit the form within this time frame to ensure compliance with the required regulations or procedures. Failing to submit the u-5 within 30 days may result in penalties or other consequences.

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147. Which US Treasury has the characteristics of 1)discount security2)trades w.o accrued interest

Explanation

T-Bills have the characteristics of being discount securities, meaning they are sold at a discount from their face value and do not pay periodic interest. They also trade without accrued interest, which means that the buyer of a T-Bill does not have to pay for any interest that has accrued since the last interest payment date. Therefore, the correct answer is T-Bills.

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148. How long does a special inactive last for after discharge?

Explanation

After discharge, a special inactive status lasts for a period of 2 years. Additionally, there is a 90-day grace period provided, extending the total duration to 2 years and 90 days. This means that individuals have this timeframe to maintain their special inactive status before it expires.

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149. According to positive convexity, as durations lengthen when

Explanation

When interest rates fall, the duration of a bond increases. This is because the present value of the bond's cash flows becomes more sensitive to changes in interest rates. As rates decline, the bond's future cash flows become relatively more valuable, causing the bond's duration to lengthen. Positive convexity refers to the property of a bond where its price increases at an increasing rate as interest rates decline. Therefore, the given answer that rates fall is consistent with the concept of positive convexity.

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150. Operating LeverageCompany A has $300,000 fixed costs, $340,000 in variable costsCompany B has $340,000 fixed costs, $300,000 in variable costsCompany A has significantly higher capacity utilization than company B however both companies have excess capacity.
if each of the companies increase unit sales by 10%, which company has faster margin growth? 
explanation is given here

Explanation

Operating leverage refers to the amount of fixed expenses that a business has. Company B has a higher Operating Leverage.

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151. What are the penalties for an individual who commits a civil crime? Who regulates this?

Explanation

The correct answer states that an individual who commits a civil crime may be required to give up their profits and pay up to three times the amount they gained from the crime. This is regulated by the SEC (Securities and Exchange Commission). The SEC is responsible for enforcing federal securities laws and protecting investors in the United States. They have the authority to impose penalties and sanctions on individuals or entities that violate these laws, including civil fines and disgorgement of ill-gotten gains.

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152. After a u-5 how long does one have before they re-qualify?

Explanation

After a U-5, one has to wait for 2 years before they can re-qualify.

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153. Which Security(s) are sold at a weekly auction

Explanation

T-Bills are sold at a weekly auction. T-Bills are short-term debt securities issued by the U.S. Department of the Treasury with a maturity of one year or less. They are considered to be one of the safest investments as they are backed by the full faith and credit of the U.S. government. T-Bills are sold at a discount from their face value and do not pay regular interest like other securities. Instead, investors earn the difference between the discounted purchase price and the face value when the T-Bill matures. Therefore, the correct answer is T-Bills.

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154. Who needs a series 7 as well as a series 79?

Explanation

Individuals who work in institutional sales, retail sales, and research roles in the financial industry typically need to have both a Series 7 and a Series 79 license. The Series 7 license is required for individuals who engage in the sale of securities products, while the Series 79 license is specifically for individuals involved in investment banking activities, including mergers and acquisitions, underwriting, and financial advisory services. Having both licenses allows professionals to effectively serve clients in different areas of the financial industry.

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155. If a man is looking to purchase a 5% of Google but doesn't intend on controlling or influencing the stock, what must he file?

Explanation

If a person is looking to purchase a 5% stake in Google without intending to control or influence the stock, they must file Schedule 13G. Schedule 13G is a form required by the Securities and Exchange Commission (SEC) for passive investors who hold a significant stake in a company but do not have the intention to actively participate in its management or decision-making. This form provides information about the investor's background, holdings, and intentions, ensuring transparency in the market.

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156. An investor is looking for information on an unsponsored company such as Nintendo, where can he look? 

Explanation

An investor looking for information on an unsponsored company such as Nintendo can find it on Pink Sheets and OTCBB. Pink Sheets is a quotation system that provides pricing and financial information for over-the-counter (OTC) securities, including unsponsored companies. OTCBB (Over-the-Counter Bulletin Board) is an electronic quotation system that displays real-time quotes, last-sale prices, and volume information for OTC securities. Both platforms are commonly used by investors to access information on unsponsored companies that are not listed on major stock exchanges.

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157. Notification to the SEC of changes in position are filed in what form and when?

Explanation

When there are changes in position, individuals are required to file a notification to the SEC. This notification is done using Form 4, and it must be filed within 2 business days of the changes occurring.

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158. Which type of shares provides shareholders with the ability to maintain a precentage of ownership and the short term right to buy below market value?

Explanation

Rights found in common stock provide shareholders with the ability to maintain a percentage of ownership and the short-term right to buy below market value. This means that shareholders have the option to purchase additional shares of common stock at a discounted price, allowing them to increase their ownership stake in the company while also potentially benefiting from buying shares at a lower price than the current market value.

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159. Which stock option requires a transaction fee

Explanation

Employee stock options require a transaction fee. When an employee exercises their stock options, they typically have to pay a fee to purchase the underlying stock at the predetermined strike price. This fee is usually deducted from the employee's proceeds when they sell the stock. Stock Appreciation Rights, on the other hand, do not require a transaction fee as they are a form of compensation that provides employees with the equivalent value of the increase in the company's stock price.

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160. If an ADR is non-sponsored who is responsible for payment?

Explanation

If an ADR is non-sponsored, the responsibility for payment lies with the broker dealer. A non-sponsored ADR is one that is created without the involvement or endorsement of the issuer of the underlying securities. In this case, the broker dealer takes on the responsibility of facilitating the issuance and trading of the ADRs, including the payment of dividends or other distributions to the ADR holders. The issuer of the securities does not have any direct involvement or responsibility for payment in the case of non-sponsored ADRs.

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161. When investing in other companies, the cost method is used if ownership interest is less than

Explanation

When investing in other companies, the cost method is used if the ownership interest is less than 20%. The cost method is an accounting method used to record investments in other companies. It is used when the ownership interest is not significant enough to exert significant influence or control over the investee. In this case, since the ownership interest is less than 20%, it falls below the threshold for significant influence, and therefore the cost method is used.

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162. After material information changes, what time frame is given to file an 8-k

Explanation

After material information changes, companies are required to file an 8-K form with the Securities and Exchange Commission (SEC) within 4 business days. This form is used to disclose important events or changes that could affect the company's financial status or stock price. The 4 business day timeframe allows for timely and transparent reporting to investors and the public, ensuring that material information is promptly disclosed.

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163. Once the SEC approves the preliminary proxy, the company can than send the definitive proxy to the shareholders and the SEC this is known as the

Explanation

Once the SEC approves the preliminary proxy, the company can then send the definitive proxy to the shareholders and the SEC. This process is known as a one-step merger. In a one-step merger, the company directly sends the definitive proxy to the shareholders for their approval, without the need for a separate tender offer or a two-step merger process.

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164. A company wants to buy back stocks, what section must he abide by? 

Explanation

Section 10b-18 is the correct answer because it specifically addresses the rules and regulations related to stock buybacks. This section provides guidelines for companies on how they can repurchase their own shares in the market without manipulating the stock price or engaging in fraudulent activities. By following the provisions outlined in Section 10b-18, the company can ensure that the buyback process is conducted in a fair and transparent manner, protecting the interests of shareholders and maintaining market integrity.

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165. When acheiving insider status, what form must be file and how long

Explanation

When achieving insider status, the required form that must be filed is Form 3, and it must be filed within 10 days.

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166. A preliminary proxy statement must be filed how long before a definitive proxy?

Explanation

A preliminary proxy statement must be filed 10 days before a definitive proxy because it provides shareholders with important information about matters to be voted on at a meeting. This allows shareholders to review and analyze the information before making an informed decision. The 10-day period allows for sufficient time for shareholders to receive and review the preliminary proxy statement before the definitive proxy is filed, which includes any updates or changes based on shareholder feedback or additional information.

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167. A US company manufactures goods in Germany and sells them throughout Europe. A decline in the US dollar against the euro would have what effect on the company's Revenue and operating profit margin?

Explanation

A decline in the US dollar against the euro would result in an increase in revenue for the US company. This is because when the US dollar weakens, the company's goods sold in Europe would become cheaper for European customers, leading to higher sales volume and thus higher revenue. However, the decline in the US dollar would not have an effect on the company's profit margin. The profit margin is determined by the company's costs and expenses, which are not directly impacted by the exchange rate. Therefore, the profit margin would remain the same even though the revenue increases.

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168. A company may have a one-time or nonrecurring event in which earnings are affected: -sale of an asset or business-severance cost-change in the method of accounting used-litigation
what is the effect of these events on the companies financials? (Balance Sheet)

Explanation

When a company has a one-time or nonrecurring event such as the sale of an asset or business, severance costs, change in accounting method, or litigation, it can have an impact on its financials, specifically the balance sheet. In this case, the correct answer states that liability goes up and retained earnings goes down. This means that the company will have an increase in its liabilities, which could be due to legal obligations or additional debts incurred. At the same time, the retained earnings, which is a part of shareholder equity, will decrease. This reduction in retained earnings could be a result of expenses or losses associated with the one-time event.

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169. When filing a schedule 13d-9, who must you file it with

Explanation

When filing a Schedule 13D-9, it must be filed with the issuer, the exchange where the security is traded, and the SEC. This is because Schedule 13D-9 is a form required by the SEC for reporting beneficial ownership of securities, and it is important to notify all relevant parties involved in the ownership and trading of the securities.

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170. True or false: the BOD decide on Ex-dividend dates.

Explanation

The Board of Directors (BOD) does not decide on Ex-dividend dates. Ex-dividend dates are determined by the stock exchange on which the company's shares are traded. This date is usually set a few days before the record date, which is the date on which shareholders must be on the company's books to receive the dividend. The BOD is responsible for declaring the dividend and determining the amount to be paid, but they do not have control over the ex-dividend date.

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171. If Disqualified from registration, you can file ______ for a hearing

Explanation

If disqualified from registration, you can file an MC-400 for a hearing. The MC-400 is a form used in the United States to request a hearing before an administrative law judge. This form is typically used in cases related to immigration, but it can also be used in other contexts where a hearing is required. By filing an MC-400, the individual can present their case and arguments before the judge, providing an opportunity to challenge the disqualification decision and potentially have it overturned.

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172. The registration form used for IPO over 75 mm public float is:

Explanation

Form S-3 is the correct answer because it is the registration form used for IPOs over 75 mm public float. This form is specifically designed for companies that have already met certain reporting requirements with the SEC and have a large public float. It allows these companies to register securities for sale to the public and provides a simplified and expedited process for filing registration statements. Form S-3 is commonly used by well-established companies with a significant market presence.

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173. Google is going to purchase its own securities back, in the process its going to either cause the company to be delisted or no longer be a reporting company, what must they file?

Explanation

When a company repurchases its own securities and as a result, it may become delisted or no longer be a reporting company, it is required to file Schedule 13e-3. This schedule is filed with the Securities and Exchange Commission (SEC) and provides information about the terms and conditions of the repurchase transaction. It includes details such as the purpose of the transaction, the source of funds, and any potential conflicts of interest. This filing ensures transparency and provides relevant information to shareholders and the general public about the repurchase process.

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174. Which Security(s) are sold at a periodic auction

Explanation

T-bills, T-notes, and T-bonds are all securities issued by the government. T-bills have a maturity of less than one year, while T-notes have a maturity between one and ten years, and T-bonds have a maturity of more than ten years. These securities are sold at periodic auctions, allowing investors to purchase them at a predetermined price. Therefore, the correct answer is "Only B and C" as T-notes and T-bonds are sold at periodic auctions, while T-bills are not.

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175. Who files a WSP and how often?

Explanation

The CEO files a WSP (Workplace Safety Plan) annually. This suggests that it is the responsibility of the CEO to ensure the safety of the workplace and to develop a comprehensive plan to address any potential hazards or risks. By filing the WSP annually, the CEO demonstrates their commitment to maintaining a safe and healthy work environment for employees.

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176. John makes a tender offer one april 5th, on April 6th the TO was amended, how long must the offer be kept open for in total? 

Explanation

The offer must be kept open for a total of 29 days because the tender offer was made on April 5th and then amended on April 6th. According to the information provided, there is no indication of any further amendments or changes to the offer. Therefore, the offer must be kept open for the original 10-day period plus the additional 19 days from April 6th to April 25th, resulting in a total of 29 days.

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177. Which Tranche provides the least predictable cash flow and maturity?

Explanation

The support or companion tranche provides the least predictable cash flow and maturity. This is because it is the last tranche to receive any principal payments and is therefore highly dependent on the performance of the other tranches. Its cash flow and maturity can be affected by factors such as prepayments and defaults on the underlying assets, making it less predictable compared to the other tranches.

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178. A company is headquartered in the US has all of its products produced in Korea. Sales of the company are split between the US (40%) and Korea (60%).
What would be the effect on the company's Operating profit margin and revenue if the US dollar declines by 10% against the Korean won?

Explanation

If the US dollar declines by 10% against the Korean won, it means that the US dollar is weaker compared to the Korean won. This would result in lower revenue for the company, as the sales in Korea (which is in Korean won) would be worth less when converted back to US dollars. However, the cost of production in Korea would remain the same. As a result, the operating profit margin (which is calculated by dividing operating profit by revenue) would decrease, as the revenue decreases while the cost of production remains constant. Therefore, the correct answer is that the operating profit margin will decline and revenue will increase.

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179. A client buys an IPO, they get a prospectus and a confirmation in the mail. Which document does the investment bank keep and how long are they required to keep it?

Explanation

The investment bank keeps the confirmation document and is required to keep it for 3 years. This document serves as proof of the client's purchase of the IPO and contains important details such as the number of shares bought, the price paid, and the transaction date. By keeping the confirmation for 3 years, the investment bank can refer back to it if any discrepancies or issues arise in the future. The prospectus, on the other hand, is given to the client and is not typically retained by the investment bank.

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180. Time Period for Annual Proxy Meeting by mail is 

Explanation

The correct answer is 20 days because the time period for the annual proxy meeting by mail is the duration within which the shareholders must receive the proxy materials before the meeting. This allows them sufficient time to review the materials, make informed decisions, and submit their proxy votes. A 20-day period strikes a balance between giving shareholders adequate time and ensuring the meeting is not delayed excessively.

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181. A corporation has issued debentures convertible at $50. The stock pays a 10% stock dividend. According to the non-dilutive feature of the bond indenture, the new conversion price would be,

Explanation

The non-dilutive feature of the bond indenture means that the conversion ratio remains the same even after the stock dividend is paid. In this case, the conversion price is $50, and since the stock dividend is 10%, the new conversion price would still be $50. Dividing $50 by the new conversion price gives us 45.45.

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182. What are the penalties for a corporation who commits a criminal crime and who regulates it?

Explanation

The explanation for the given correct answer is that the penalties for a corporation who commits a criminal crime are up to $25 and they are regulated by the Department of Justice (DOJ). This means that if a corporation is found guilty of a criminal offense, they can be fined up to $25 and the DOJ is responsible for enforcing and regulating these penalties.

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183. What is the statue of limitations for arbitration?

Explanation

The statute of limitations for arbitration is 6 years. This means that an individual has a period of 6 years from the date of the dispute to initiate an arbitration claim. After this time period has passed, the individual may no longer be able to pursue arbitration for the specific dispute.

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184. Time Period for Annual proxy meeting by electronic notice

Explanation

The correct answer is 40 days because the time period for the annual proxy meeting by electronic notice is the longest option provided. This suggests that the meeting requires a longer notice period to ensure that all participants have ample time to receive and review the electronic notice. A longer notice period may be necessary to accommodate any potential technical difficulties or delays in delivering the notice electronically.

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185. If you suspect a foreign client of having $5k or more in undeclared money, what is required?

Explanation

If there is suspicion that a foreign client has $5k or more in undeclared money, it is required to file under SARs (Suspicious Activity Reports) within 30 days. SARs are reports filed by financial institutions to report suspicious transactions that may indicate criminal activity, including money laundering. Filing under SARs helps to ensure compliance with anti-money laundering regulations and assists in the detection and prevention of financial crimes.

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186. A Security that allows the holder to buy shares of common stock at a preset price, typically at a premium is known as a 

Explanation

A warrant is a security that gives the holder the right to buy shares of common stock at a predetermined price, typically at a premium. However, the correct answer states that the warrant is found in preferred stock or bond, indicating that the warrant is associated with these types of securities rather than common stock.

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187. If John makes a tender offer which causes him to own 5% of the share what must the issuer file?

Explanation

When John makes a tender offer and acquires 5% of the shares, the issuer must file Schedule 14-9. This schedule is required by the Securities and Exchange Commission (SEC) and is used to disclose information about the tender offer to shareholders. It provides details such as the terms of the offer, the purpose of the offer, and any potential conflicts of interest. Filing Schedule 14-9 ensures transparency and allows shareholders to make informed decisions regarding the tender offer.

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RYX Waste Developement has increased its ownership of JV Recyclers...
When quoting a yield, how much does 1% represent?
A CMO (Collateralized Mortgage Obligations) is a mortgage backed bond...
Keynesian theory, has a fiscal policy that utilizes _________ to...
Average Workweek, Initial Claims for unemployment, New orders for...
Company J had Sales (revenue) of 250, Gross Profit of 110, Operating...
Under CIP, you must check the name of a foreign client against which...
Stock appreciation rights (SARs) are issued by who and benefit who by...
If an ADR is sponsored, who pays for it?
What is the waiting period for unsuccessful attempts on the series 79
Anyone who acquired 5% or more of equity must file
What best Describes Regulation T
When using FIFO for inventory, (First in, First out) the first are...
How often are customer complaints files and with who?
If GM is offering a put valued at $60 and the market price is $54 it...
Peter knows company A needs to buy 100 units of a product.petere tells...
How often does one take the regulatory element?
True or false: If you work in public finance, you are considered a RR
Jakey has 1,000 shares in google. Google decides that this year...
Typically, a higher yield bond costs
The following are all derivatives except
RFQ corporation reported net income of $30mm which included a...
Which best describes OSJ?
If GM on june is offering an option price of $35 to call at 3 and the...
An investor may receive additional dividends based on company profits,...
Companies exceeding $10mm and more than 500 shareholders must register...
______________ are foreign securities held in a us bank located in a...
The par value of a bond is $1,000. The interest of a bond pays 1...
Which bond is a foreign bond that is issued in the united states, pays...
If John makes a tender offer which causes him to own 6% of the share...
True or false, balance sheet indicates a Minority Interest in net...
What are the penalties for an individual who commits a criminal crime...
If you notice a foreign country such as syria or north korea...
After receiving notice, how long do you have to complete...
How often is AML Tested?
Trading securities outside the regular scope of employement is...
If one wanted to use a form to find out everything they needed to know...
Which Mortgage is Fully Backed by the US Government
The calculation for market Capitalization (outstanding shares x market...
If a firm uses accelerated depreciation for tax reporting and straight...
You are a RR, your father in law asks you for money, he is your...
When referring to GNMA, FNMA, FHLMC, what is true about interest...
Client XYZ wants to share his losses and profits with you, is it...
Which US Treasuries have the characteristics described...
Average duration of employment, prime rate, CPI for services, labor...
When investing in other companies, the equity method is used if...
An OSJ, must be supervised by an
How often are 10Qs Filed a year?
How long does the terminating company have to submit a u-5?
Tulips.com issues a convertible bond with a conversion price of $25...
True or False: Operating lease shows up on your balance sheet
True or False: balance sheet and income statements are combined when...
When a dividend is ______, the following occurs:1)retained earnings...
True or False: if you work for the DPP you are considered a Registered...
Who is responsible for the implementation of Keynesian Theory?
A change in statements, projections on revenue or expenses or a change...
Annual filings covering transactions such as gifts are filed under...
Which is the correct order of the dividend dates?
Which US security(s) can be stripped? (coupon payments and principles...
Industrial Production, Manufacturing and trade sales, personal income...
A Stronger Foreign Currency will have
How long do you have for the transgression of a felony...
When making a TO, how long does the subject company have to notify and...
Can a GDR be offered in the united states
Assume an issuer calls in a bond, where does he get money to repay his...
Who are options created by?
Institutional investment managers file what form quarterly?
US Treasuries are exempt from
A u-5 must be submitted within
Which US Treasury has the characteristics of 1)discount...
How long does a special inactive last for after discharge?
According to positive convexity, as durations lengthen when
Operating LeverageCompany A has $300,000 fixed costs, $340,000 in...
What are the penalties for an individual who commits a civil...
After a u-5 how long does one have before they re-qualify?
Which Security(s) are sold at a weekly auction
Who needs a series 7 as well as a series 79?
If a man is looking to purchase a 5%...
An investor is looking for information on an unsponsored company such...
Notification to the SEC of changes in position are filed in what form...
Which type of shares provides shareholders with the ability to...
Which stock option requires a transaction fee
If an ADR is non-sponsored who is responsible for payment?
When investing in other companies, the cost method is used if...
After material information changes, what time frame is given to file...
Once the SEC approves the preliminary proxy, the company can...
A company wants to buy back stocks, what section must he abide...
When acheiving insider status, what form must be file and how long
A preliminary proxy statement must be filed how long before a...
A US company manufactures goods in Germany and sells them throughout...
A company may have a one-time or nonrecurring event in which earnings...
When filing a schedule 13d-9, who must you file it with
True or false: the BOD decide on Ex-dividend dates.
If Disqualified from registration, you can file ______ for a hearing
The registration form used for IPO over 75 mm public float is:
Google is going to purchase its own securities back, in the process...
Which Security(s) are sold at a periodic auction
Who files a WSP and how often?
John makes a tender offer one april 5th, on April 6th the TO was...
Which Tranche provides the least predictable cash flow and maturity?
A company is headquartered in the US has all of its products produced...
A client buys an IPO, they get a prospectus and a confirmation in the...
Time Period for Annual Proxy Meeting by mail is 
A corporation has issued debentures convertible at $50. The stock pays...
What are the penalties for a corporation who commits a criminal crime...
What is the statue of limitations for arbitration?
Time Period for Annual proxy meeting by electronic notice
If you suspect a foreign client of having $5k or more in undeclared...
A Security that allows the holder to buy shares of common stock at a...
If John makes a tender offer which causes him to own 5% of the share...
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