Sie Qualifying Test- Ggm Slot # 2

50 Questions | Total Attempts: 54

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Sie Qualifying Test- Ggm Slot # 2

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Questions and Answers
  • 1. 
    All of the following must be on the cover page or beginning of the summary prospectus of a mutual fund EXCEPT
    • A. 

      The share class or classes offered by the fund

    • B. 

      The name of the investment advisor

    • C. 

      The fund share class or classes ticker symbols

    • D. 

      The website where a full prospectus may be downloaded

  • 2. 
    An issuer of bonds can be
    • A. 

      Corporate and both the federal and municipal governments

    • B. 

      Federal and municipal governments only

    • C. 

      Corporates and municipal governments only

    • D. 

      Corporate entities only

  • 3. 
    Once a corporate liquidation proceeding in court is underway, common shareholders know that
    • A. 

      They are not guaranteed to be paid back any amount

    • B. 

      They are guaranteed only payment of their initial investment

    • C. 

      If preferred shareholders claims are met, their claims are guaranteed to be met

    • D. 

      Only if they are paid first, can bondholders have their claims met

  • 4. 
    An investor sells short 1 MJS June 55 put at 2. The current market value of LMN is 56. The investor's maximum loss potential is
    • A. 

      Unlimited

    • B. 

      $5,425

    • C. 

      $5,300

    • D. 

      $10,600

  • 5. 
    Transactions where the penny stock rules are applicable would be those that
    • A. 

      Neither solicited or unsolicited transactions

    • B. 

      Are unsolicited

    • C. 

      Are either solicited or unsolicited

    • D. 

      Are solicited

  • 6. 
    Regarding investment products, which of the following is TRUE?
    • A. 

      Equity securities represent ownership in an issuing company.

    • B. 

      Derivative securities represent ownership in an issuing company.

    • C. 

      Both derivatives and debt represent ownership in an issuing company.

    • D. 

      Debt securities represent ownership in an issuing company.

  • 7. 
    With interest rates in the marketplace at 7%, it could be expected that in the secondary market, a bond carrying a 5% coupon would trade
    • A. 

      Only in accordance to supply and demand

    • B. 

      Upward in price

    • C. 

      Unaffected by the changing interest rates

    • D. 

      Downward in price

  • 8. 
    The market price of a company's common stock could be affected by
    1. the company's earnings
    2. changes in the business cycle
    3. FRB policies
    4. International conflicts
    • A. 

      2 & 3

    • B. 

      1 & 2

    • C. 

      1 & 3

    • D. 

      1,2,3 & 4

  • 9. 
    Commercial paper is
    • A. 

      Unsecured debt with a maximum maturity of 1 year

    • B. 

      Unsecured debt with a maximum maturity of 9 months

    • C. 

      Secured debt with a maximum maturity of 9 months

    • D. 

      Secured debt with a maximum maturity of 1 year

  • 10. 
    Which of the following securities are nonexempt from registration under the Securities Act of 1933?
    • A. 

      Municipal securities and U.S. government agency issues

    • B. 

      Corporate debt issues and U.S. government agency issues

    • C. 

      Real estate investment trusts and corporate equity issues

    • D. 

      U.S. government Treasury issues and real estate investment trusts

  • 11. 
    Options contracts
    • A. 

      Give both parties the right to buy or sell the underlying security

    • B. 

      Obligate both parties to purchase the underlying security

    • C. 

      Give one party the right to buy or sell the underlying security

    • D. 

      Obligate both parties to sell the underlying security

  • 12. 
    A stock currently has a market value of $75 per share. If a put option on the stock has an exercise price of $60, the put option is
    • A. 

      In the money

    • B. 

      Out of the money

    • C. 

      At breakeven

    • D. 

      At the money

  • 13. 
    An investor who is long MES equity put options is
    • A. 

      Is bearish on the put price but bullish on MES stock

    • B. 

      Bullish on MES stock

    • C. 

      Wants MES stock to remain fixed at the current price

    • D. 

      Bearish on MES stock

  • 14. 
    The time to maturity for debt instruments
    • A. 

      Can never be shorter than 5 years

    • B. 

      Can be any length of time

    • C. 

      Can never be longer than 30 years

    • D. 

      Must always be between 5 and 30 years

  • 15. 
    Which position has the greatest potential risk if the price of the underlying stock goes up?
    • A. 

      Short put

    • B. 

      Long put

    • C. 

      Short call

    • D. 

      Long call

  • 16. 
    Which of the following investors are bearish?
    • A. 

      Put buyers and put writers

    • B. 

      Call buyers and put writers

    • C. 

      Call writers and put buyers

    • D. 

      Call buyers and call writers

  • 17. 
    Your customer has purchased an MJS October 35 call at 4. Their proof of ownership will be
    • A. 

      The trade confirmation

    • B. 

      The certificate issued by the underlying company (MJS)

    • C. 

      The executing broker-dealer's account records

    • D. 

      The OCC issued certificate

  • 18. 
    At a shareholders' meeting, a mutual fund investor might be called upon to vote on any of the following EXCEPT
    1. changes in membership in the board of directors
    2. whether to sell a certain company's stock out of the portfolio
    3. approval of the investment adviser's contract
    4. changing to a new landscaper for the fund's headquarters
    • A. 

      1 & 4

    • B. 

      2 & 4

    • C. 

      2 & 3

    • D. 

      1 & 3

  • 19. 
    All of the following describe mutual funds EXCEPT
    • A. 

      Funds simplify tax calculations for investors by supplying Form 1099

    • B. 

      Various withdrawal plans may be offered for redemption of shares

    • C. 

      The portfolio is professionally managed

    • D. 

      Shares may be sold either on an exchange or over the counter

  • 20. 
    Preferred shareholders who expect missed dividend payments to be eventually paid are most likely to own
    • A. 

      Straight preferred stock

    • B. 

      Convertible preferred stock

    • C. 

      Callable preferred stock

    • D. 

      Cumulative preferred stock

  • 21. 
    An investor owns one NMS June 40 call trading at 5. If the underlying value of NMS stock is 45, the contract is trading
    • A. 

      With no intrinsic value

    • B. 

      At parity

    • C. 

      Out of the money

    • D. 

      At the money

  • 22. 
    Which of the following are TRUE of municipal revenue bonds?
    1. They are secured by a specific pledge of property.
    2. They are a type of general obligation bond.
    3. They are not subject to statutory debt limits.
    4. They are backed by a facilities ability to generate revenue.
    • A. 

      1 & 2

    • B. 

      1 & 4

    • C. 

      3 & 4

    • D. 

      2 & 3

  • 23. 
    An investor makes several statements regarding what they know about exchange-traded funds. All of them are correct EXCEPT
    • A. 

      I can't buy them on margin because they represent an entire basket of stocks like mutual funds do

    • B. 

      I can expect them to have lower expense and operating costs than mutual funds

    • C. 

      I won't have to pay any sales charges as I do with mutual funds, but I will have to pay commissions

    • D. 

      I'll be able to buy or sell them throughout the trading day like stocks trading on an exchange

  • 24. 
    For Treasury bills, which of the following are TRUE?
    1. T-bills are issued at a discount to par.
    2. T-bills have maturities of 1 to 10 years
    3. Most T-bill issues are callable and convertible.
    4. T-bills are a direct obligation of the U.S. government.
    • A. 

      2 & 4

    • B. 

      2 & 3

    • C. 

      1 & 4

    • D. 

      1 & 3

  • 25. 
    A company's business operations are overseen by
    • A. 

      Stockholders placed in position by the board of directors

    • B. 

      A board of directors elected by bondholders

    • C. 

      Bondholders placed in position by the board of directors

    • D. 

      A board of directors elected by shareholders

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