Practice Exam Questions Flashcards
Which of the following investment companies will always be passively managed?
A. a face-amount certificate company
B. a unit investment trust
C. a mutual fund
D. a closed-end investment company
Answer : B
Explanation:
A unit investment trust is always passively managed. Some mutual funds, such as index funds, may also be passively managed, but not all mutual funds are passively managed.
Which of the following is exempt from registering as an investment company under the
Investment Company Act of 1940?
A. a unit investment trust
B. a non-diversified mutual fund
C. a company that sells its securities only to accredited investors
D. a company that has no sales charges or management fees
Answer : C
Explanation:
A company that sells its securities only to accredited investors is exempt from registering as an investment company under the Investment Company Act of 1940. All the other choices describe investment companies that are required to file a registration statement with the SE
Ms. Newbie is a registered representative with Savvy Investments and has recently gotten married. (Her new name is Mrs. Newbie-Oldman.)Her husband has been a client of hers, and the couple now wants to put her name on the account. In this case:
A. Mrs. Newbie-Oldman may only share in the account to the extent that she deposits funds in the account.
B. Mrs. Newbie-Oldman must obtain written authorization from Savvy Investments to put her name on the account.
C. Mrs. Newbie-Oldmans husband must provide written authorization to Savvy Investments for his new bride to be included on the account.
D. Both B and C are true statements.
Answer : D
Explanation:
If Mrs. Newbie-Oldman and her new husband want her name on what was previously his account, she must obtain written authorization from her employer, Savvy Investments, and her new husband must provide his written authorization to Savvy. She is exempted from the proportional investment requirement as Mr. Oldmans spouse, but not from the written authorization requirements under FINRA Rule 2150
Any compensation earned by a broker-dealer and its registered representative on the sale of mutual fund shares must be returned to the funds underwriter if the purchaser decides to redeem his shares within:
A. 30 days.
B. 1 week.
C. 7 business days.
D. 5 business days.
Answer : C
Explanation:
Any compensation earned by a broker-dealer and its registered representative on the sale of mutual fund shares must be returned to the funds underwriter if the purchaser decides to redeem his shares within 7 business days.
A general decrease in price levels in the economy is referred to as:
A. disinflation.
B. stagflation.
C. recession.
D. deflation.
Answer : D
Explanation:
A general decrease in price levels in the economy is referred to as deflation. Disinflation refers to a decrease in the rate of inflation, but price levels in general are still rising.
Stagflation refers to an economic condition characterized by high levels of inflation and high unemployment levels. A recession is a prolonged decline in the general economy, typically measured by a decline in the nations gross domestic product (GDP).
Which of the following statements regarding the tax treatment of variable annuity contracts is false?
A. Earnings on the contributions to a variable annuity are not taxed during the accumulation phase.
B. If an investor opts to make a random, partial, lump sum withdrawal, the entire amount of the withdrawal will be taxed as ordinary income to the investor.
C. If an investor opts to receive regular payments of a specific amount -i.e., annuities-part of each payment will be considered repayment of principal and will not be subject to taxation.
D. An investor who makes a withdrawal prior to having reached the age of 62 will be subject to a 10% penalty on the withdrawal.
Answer : D
Explanation:
The false statement is that an investor who makes a withdrawal prior to having reached the age of 62 will be subject to a 10% penalty. As long as the investor has reached the age of 59 , no penalty will be assessed.
Which of the following statements about 1035 exchanges are true?
I. A 1035 exchange refers to the exchange of all of the shares owned in one mutual fund for shares of another mutual fund in the same family of funds.
II. A 1035 exchange refers to the exchange of one variable annuity contract for another variable annuity contract without the need to pay tax on any of the income or capital appreciation associated with the original contract.
III. A 1035 exchange refers to the exchange of a variable annuity contract for a whole life insurance policy offered by the same company with no tax consequences to the transaction.
A. I only
B. II only
C. I and II only
D. I, II, and III
Answer : B
Explanation:
Only Selection II is true regarding 1035 exchanges. A 1035 exchange refers to the exchange of one variable annuity contract for another variable annuity contract without the need to pay tax on any of the income or capital appreciation associated with the original contract. This does not refer to the exchange of one mutual fund for another, which is a taxable event; nor does the 1035 exchange involve exchanging a variable annuity for a life insurance policy.
George Geek is 30 years old, single, and earns $103,000 a year as a software engineer for a small, start-up IT company. Georges company does not itself offer a retirement plan, and
George is considering his options. The current contribution limits for both the traditional IRA and Roth IRA plans is the lesser of $5,000 or 100% of earned income.
Which of the following statements applies to Georges situation?
A. George’s contributions to a traditional IRA will be tax-deductible.
B. Georges contributions to a Roth IRA will be tax-deductible as long as his income is below the threshold specified by the IRS for the current year.
C. Assuming that George can contribute to both the traditional IRA and the Roth IRA under the current income thresholds, he will be allowed to contribute $5,000 to each of the plans.
D. Assuming that George can contribute to both a traditional IRA and a Roth IRA under the current income thresholds, his combined contribution to the two plans cannot exceed $5,000.
Answer : D
Explanation:
If George is 30 years old, single, and earns $103,000 as a software engineer for a company that does not offer a retirement plan, his combined contribution to a traditional
IRA and a Roth IRA cannot exceed $5,000, assuming that he is eligible to contribute to both. Since George has no other retirement plan, he will be eligible to make tax-deductible contributions to a traditional IRA regardless of his income level. Contributions to a Roth IRA are never tax-deductible in any situation. (FYI: In 2010, a single taxpayer who earns less than $105,000 during the year is eligible to participate fully in a Roth IRA, but this number can change.
Which of the following are included in the expense ratio of a fund?
I. 12b-1 fees -
II. brokerage costs incurred by the fund when it buys and sells securities
III. redemption fees -
IV. management fees -
A. I and IV only
B. I, II, and IV only
C. I, III, and IV only
D. I, II, III, and IV
Answer : A
Explanation:
Of the selections, only 12b-1 fees and management fees are included in the expense ratio of the fund. Brokerage costs that the fund incurs when it buys and sells securities are not included (which is why a funds turnover ratio is important to consider.) Redemption fees are paid by the shareholder to the fund, so it would not be included in a funds expense ratio since it is not an expense of the fund.
Which of the following statements regarding a unit investment trust (UIT) is false?
A. A UIT has a fixed number of shares.
B. UITs are actively managed.
C. Shares of UITs trade on exchange floors.
D. All UITs are established with a termination date.
Answer : B
Explanation:
The statement that UITs are actively managed is the false statement. All UITs are passively managed. They do have a fixed number of shares that may either be redeemed through the trust or traded on exchange floors, and all UITs are established with a termination date.
Which of the following actions will result in a taxable event for Tex Payor, an investor in the
Invest4U Mutual Fund?
I. Tex sells some of his shares of the fund at a profit.
II. Tex exchanges some of his shares in Invest4U for shares of another fund in the same family of funds.
III. Tex opts to reinvest any dividend or capital gain income he might have received in the fund to buy additional shares of the fund in lieu of receiving a check from the fund.
A. I only
B. I and II only
C. I and III only
D. I, II, and III
Answer : D
Explanation:
All three selections describe actions that will result in a taxable event for Tex Payor as an investor in the Invest4U Mutual Fund. If Tex sells some of his shares of the fund for a profit, he will earn capital gains, which represent taxable income to him. When he exchanges some shares of Invest4U for another, he is selling shares of Invest4U to reinvest in the other, and the sale of the shares in Invest4U will result in either a capital gain or capital loss that he must report to the IRS. Even if Tex chooses to reinvest the dividend or capital gain income for which Invest4U would have otherwise have sent him a check, he has to pay taxes on the money as though he had received the check.
You have just become a licensed registered representative with Fine, Howard, Fine and
Associates, a broker-dealer. (Congratulations!) You have had a brokerage account with
Anon Brokerage for the past ten years. In this instance, you are required to:
A. transfer the assets in your account with Anon to a Fine, Howard, Fine account and close your account with Anon.
B. provide Fine, Howard, Fine with written notification of this fact.
C. provide Anon Brokerage with written notification of your association with Fine, Howard, Fine.
D. The actions described in both B and C are requirements.
Answer : D
Explanation:
If you have an account with another member firm upon becoming associated with a member firm, you are required to provide both the firm with which you have your account and your new employer in writing of the fact.
On Friday, August 6th, the Board of Directors of Ecolab (ECI) announced that it would pay a dividend of $0.155 a share to shareholders of record as of Tuesday, September 21st.The dividend checks were scheduled to be mailed on Friday, October 15th. In this scenario, the payment date is:
A. Friday, August 6th.
B. Friday, September 17th.
C. Tuesday, September 21st.
D. none of the above.
Answer : D
Explanation:
The payment date is none of the choices listed. The payment date is the day the checks are scheduled to be mailed-Friday, October 15th.
Private placements are exempt from the registration requirements of the Securities Act of
1933 under the rules contained in:
A. Regulation A.
B. Regulation D.
C. Regulation E.
D. the Securities Exchange Act of 1934.
Answer : B
Explanation:
Private placements are exempt from the registration requirements of the Securities Act of
1933 under the rules contained in Regulation D. Regulation D dictates the qualifications that must be met for the security to be exempted, such as the maximum number of unaccredited investors and the investors to whom the security may be sold. Regulation A dictates the rules to qualify an issue for a small issue exemption. The Securities Exchange
Act of 1934 deals with the secondary market, not the new issue market.
A preemptive right:
A. is a call option that is usually attached to a bond as a sweetener.
B. gives a bond owner the option to sell the bond back to the issuer at a pre-specified price.
C. entitles its owner to buy shares of stock at a specified price within a specified time period in order to maintain his proportionate ownership in the firm.
D. is a feature on some preferred stock issues that allows the preferred shareholders to exchange their preferred shares for shares of the common stock of the firm.
Answer : C
Explanation:
A right entitles its owner to buy shares of stock at a specified price within a specified time period in order to retain his proportionate ownership in a firm. As such, it is a call option, but it is not usually attached to a bond as a sweetener; that would be a warrant.
Ms. Newbies client, Mr. Nomad, has decided that he wants to go on an extended backpack trip through the Amazon. Since hell be out of touch, he has given a friend of his limited power attorney to act on his behalf. Based on this, Mr. Nomads friend can:
I. present Ms. Newbie with an order to purchase securities on Mr. Nomads behalf.
II. present Ms. Newbie with an order to sell securities on Mr. Nomads behalf.
III. request a check be issued to him so that he can send Mr. Nomad some money.
A. I only
B. I and II only
C. I, II, and III
D. none of the above. Only a relative can hold a power of attorney to engage in financial transactions for the grantor.
Answer : B
Explanation:
Mr. Nomads friend can engage in the activities described in Selections I and II only. A limited power of attorney gives Mr. Nomads friend the authority to buy and sell securities on Mr. Nomads behalf, but not to make any cash withdrawals. He would need a full power of attorney to be able to do so.
A bond has a face value of $1,000, matures in 10 years, and pays an 8% coupon, with interest paid semiannually. If the bond is priced to yield 8.8%, it is selling:
A. at par.
B. at a discount.
C. at a premium.
D. at its maturity value.
Answer : B
Explanation:
If the bond is priced to yield 8.8%, it is selling at a discount. Its nominal yield is the same as its coupon rate, 8%, which is what it would yield if it were selling at its par value, which is the same as its maturity value and its face value–$1,000. In order to be yielding more than this, the bond has to be selling for less than its face value, such that investors are also getting a return from capital gains. A bond that is selling below its face value is said to be selling at a discount.
Which of the following statements about hedge funds is true?
A. They are fairly low risk since the portfolio managers use investment strategies designed to hedge their bets.
B. They are not regulated by the Investment Company Act of 1940.
C. They are considered to be very liquid investments.
D. They have low management fees, like index funds.
Answer : B
Explanation:
The true statement about hedge funds is that they are not regulated by the Investment
Company Act of 1940. They are very risky, are illiquid-investors may only make contributions and withdrawals at specified times-and they have extremely high management fees.
Mr. Schaker hasnt been seeing a lot of clients these days with the recent market downturn- which means he hasnt been generating any commissions, and commissions are his bread and butter. So, Mr. Schaker does some Googling on his computer and notes that a prominent family of load funds has just introduced a new global fund. Scribbling the name and contact information of the fund family on his notepad, he begins calling his existing clients and promoting the new fund, encouraging his clients to redeem some shares in their existing funds to invest in this fund.
Has Mr. Schaker violated any securities laws?
A. No. In FINRA’s rules regarding fair dealing with customers, the SRO clearly states that “This does not mean that legitimate sales efforts in the securities business are to be discouraged. . . “
B. Yes. Mr. Schaker is recommending the fund to his existing clients to benefit himself, not them.
C. No. Research indicates that new funds tend to offer abnormally high returns for the first 12 months of their existence, so Mr. Schaker is doing his clients a favor even if he himself stands to profit.
D. D. Yes. A registered representative should always refrain from recommending shares of a load fund; trades involving load funds should always be unsolicited.
Answer : B
Explanation:
Yes. Mr. Schaker has violated securities laws in recommending a fund that he doesnt even seem to have researched very well to his existing clients, some of whom may not be suitable candidates for a global fund, which invests in foreign as well as domestic securities. Although FINRAs rules do indicate that it is not trying to stymie legitimate sales efforts, Mr. Schakers actions do not fall within this category. There is no research that indicates new funds tend to offer abnormally high funds for the first 12 months of their existence, and if Mr. Schaker would have implied that, he could be up on criminal fraud charges. There is no law, however, that prohibits a registered representative from recommending a load fund to a client, as long as there is a legitimate reason for doing so.
Noah Mete is interested in selling his shares of the Lambchops Corporation, which trades over-the-counter. The market maker with the best bid price–$3.15–is Veggie Investments.
The market maker with the best ask price–$3.27-is Carnivor Investments. Noah conducts trades in NYSE-listed stocks through his broker, Omnivor and Associates.
Given this scenario, which of the following statements is true?
A. Noah can sell his shares of Lambchops Corporation at the bid price of $3.15 by contacting Veggie Investments directly.
B. Noah can sell his shares of Lambchops Corporation at the ask price of $3.27 by contacting Carnivor Investments directly.
C. Noah can sell his shares of Lambchops Corporation at the bid price of $3.15 by contacting Omnivor and Associates.
D. Noah can sell his shares of Lambchops Corporation at the ask price of $3.27 by contacting Omnivor and Associates.
Answer : C
Explanation:
Noah can sell his shares of Lambchops Corporation for $3.15 from the market maker with the best bid price, Veggie, by contacting his broker, Omnivor and Associates, which will execute the transaction. The bid price is the price at which market makers in the over-the- counter market are willing to buy the stock, and over-the-counter transactions, like NYSE transactions, are executed by brokers.
Upon receiving approval via a majority vote of its shareholders, a mutual fund is permitted to:
A. change from a diversified company to a non-diversified company.
B. engage in margin transactions.
C. retain any dividends and capital gains that it earned on its portfolio rather than paying them out to the shareholders.
D. issue preferred stock.
Answer : A
Explanation:
Upon receiving approval via a majority vote of its shareholders, a mutual fund is permitted to change from a diversified company to a non-diversified company. The fund is not allowed to engage in margin transactions, fail to make dividend and capital gain distributions, or issue preferred stock under any circumstances.
Chandler is a registered representative with GetErDone Broker-Dealers, a FINRA member- firm. His friend, Phoebe, is employed by FlyByNight Investments, which is not a member of
FINRA, or any other securities association for that matter. Given these facts:
A. If Chandler executes any transactions for Phoebe, he is required to charge her the same commission that he charges any member of the general public.
B. Chandler is prohibited from engaging in any financial transactions with Phoebe.
C. Chandler is prohibited from splitting any commissions with Phoebe.
D. Both A and C are true.
Answer : D
Explanation:
Given that Chandler is a representative with a member firm while Phoebes employer is not a member of any known securities association, he is required to charge Phoebe the same commission that he charges any member of the general public when executing a transaction for her and is prohibited from splitting commissions with her. He is not prohibited from engaging in any financial transactions with her; he simply must do so for the same commissions or fees, and on the same terms and conditions as are. . .accorded to the general public, according to FINRA.
The MaxFee Mutual Fund has a front-end load of 8.5%. If its net asset value (NAV) per share is currently $32, for what price can an investor buy shares of the fund? (Round your answer to the nearest cent.)
A. $29.49
B. $34.97
C. $34.72
D. $29.28
Answer : B
Explanation:
If the MaxFee Mutual Fund has a front-end load of 8.5% and a net asset value per share of
$32, an investor can buy shares of the fund at its offer price of $34.97. Offer price = NAV/
(1 - % load) = $32/ (1 - 0.085) $34.
Ms. Fortune died at the relatively young age of 60. Which of the following options are available to her 65-year-old spouse, the beneficiary of her IRA?
I. withdraw the entire balance in a single lump sum
II. continue to make contributions to the IRA as if it were his own
III. roll his deceased wifes IRA into an existing IRA that he owns
A. I only
B. I and II only
C. I and III only
D. I, II, and III
Answer : D
Explanation:
If Ms. Fortune died at the age of 60 and her beneficiary is her 65-year-old spouse, he can choose to withdraw the entire balance in a single lump sum, continue to make contributions to the IRA as if it were his own, or roll the IRA into another existing IRA. If he opts to withdraw the entire balance in a single lump sum, he will have to pay tax on that distribution at his marginal tax rat
Which of the following steps in the underwriting process will occur last?
A. The underwriting syndicate is formed.
B. The selling group is organized.
C. The public offering price is set.
D. A red herring prospectus is circulated to the public.
Answer : C
Explanation:
The public offering price is set at the latest possible minute. The underwriters want to have the most current information available when setting the price, especially since they will experience the loss if the securities fail to sell for at least that price.
Sarah Bean is a registered representative with NewWave Investments, a family of mutual funds. She has recommended one of NewWaves funds to a client and given him a prospectus. The prospectus provides information about the funds breakpoints and indicates that an investment of $25,000 or more will lead to a reduced front-end load. The prospectus also clearly explains the details of a letter of intent. Sarahs client invests
$23,000 in the fund then and there without even opening the prospectus.
Has Sarah violated any of FINRAs rules of conduct?
A. No. Sarah properly provided her client with a prospectus prior to selling him shares of the fund.
B. Yes. Sarah is required to explain the concepts of breakpoints and letters of intent to her client.
C. Yes. Sarah needed to tell her client that he would have to read through the prospect us to ensure he understood all aspects of the investment before she could take any money from him.
D. Yes. Sarah is not permitted to accept funds from a client without the presence of her immediate supervisor.
Answer : B
Explanation:
Yes. Sarah is required to explain the concepts of breakpoints and letters of intent to her client and her failure to do so is a violation of FINRAs rules of conduct. A registered representative selling mutual fund shares is required to explain the salient facts contained in a funds prospectus to a client before selling him the fund shares. Sarahs failure to do so is deemed inconsistent with just and equitable principles of trade.
The difference between a “redemption fee” and a “rear-end load” is that:
A. the redemption fee is another name for a 12b-1 fee, which is an annual expense associated with the fund.
B. a rear-end load is used to compensate a salesperson who has sold shares of the fund; a redemption fee is charged to offset the expenses a fund incurs in processing share redemptions.
C. the redemption fee refers to charges incurred by the fund when it sells securities it owns; the rear-end load is a fee that is incurred by investors in the fund when they redeem their shares of the fund.
D. There is no difference. These are synonymous terms.
Answer : B
Explanation:
The difference between a redemption fee and a rear-end load is that a rear-end load is used to compensate a salesperson who has sold shares of the fund, while a redemption fee is charged to offset the expenses a fund incurs in processing share redemption
Your client, Mr. Whiff, knows nothing about investment companies, and you are educating him about the advantages of investing through one, rather than investing in individual stocks and bonds.
Which of the following statements could get you in trouble?
A. “In investing through an investment company you will be able to invest a small amount of money and achieve greater diversification than you could otherwise.”
B. “Investing through an investment company will result in a lower tax bill than had you invested in individual stocks and bonds.”
C. “An investment in an investment company gives you an undivided interest in the company, in proportion to the number of shares you own.”
D. By investing your money through an investment company, you are getting the benefit of professional management.”
Answer : B
Explanation:
The statement that could get you in trouble is, Investing through an investment company will result in a lower tax bill than had you invested in individual stocks and bonds.
Improved tax planning is not a benefit of investing through an investment company since the funds manager cannot make investment decisions based on the tax status of each of the funds shareholders. An investor who actively manages his own portfolio is better able to lower his tax bill.
Regulation D:
I. enables smaller firms to raise capital more quickly and more cheaply.
II. exempts the issuing firm from all disclosure requirements as long as the issue is being sold to no more than five investors.
III. has restrictions regarding the resale of the securities being sold.
A. I only
B. I and II only
C. I and III only
D. I, II, and III
Answer : C
Explanation:
Only Selections I and III are accurate statements regarding Regulation D. Regulation D enables smaller firms to raise capital more quickly and more cheaply, but it also restricts the resale of the securities being sold in a Regulation D offering. It does not exempt the issuing firm from all disclosure requirements, even if the issue is being sold to only a single investor. The disclosure requirements are minimal with a Regulation D offering, however.
Which of the following would not be required to display prominently the name of the member firm issuing it?
I. sales literature distributed to an institutional investor
II. correspondence by a registered representative with her client
III. an advertisement to recruit new registered representatives
A. I only
B. I and II only
C. III only
D. I, II, and III
Answer : C
Explanation:
Only an advertisement to recruit new registered representatives is not required to display prominently the name of the member firm issuing it.
Patty Planner has been contributing a sum to a non-qualified variable annuity each month for the last fifteen years in order to reach her ultimate goal of an early retirement. Now that she has turned 60, Patty has decided to retire. Her annuity is now worth $69,000, and her total contributions were $36,000. Patty decides to withdraw $15,000 of her accumulation as a lump sum to fund an extended vacation to Europe that she has always promised herself.
Which of the following statements applies to Pattys situation?
A. Her $15,000 withdrawal will be taxed as capital gain income, at a preferential rate, but she will also have to pay a 10% penalty for withdrawing the funds prior to turning 62.
B. Her $15,000 withdrawal will be taxed as ordinary income to her at her marginal tax rate.
C. Her $15,000 withdrawal is not taxable since it is less than the amount of her total contributions to the plan, but she will be subject to a 10% penalty for early withdrawal.
D. Her $15,000 withdrawal will be taxable as ordinary income to her at her marginal tax rate, and she will also be subject to a 10% penalty for early withdrawal.
Answer : B
Explanation:
If 60-year-old Patty has contributed $36,000 to the annuity that is now worth $69,000 and decides to withdraw $15,000 as a lump sum, the $15,000 will be taxed as ordinary income.
She will not be subject to any penalties for early withdrawals since she is over 59 years old, but the IRS uses LIFO-last-in/first-out-accounting in determining whether the income is taxable, so the $15,000 withdrawal will be considered to come from earnings, which have grown tax-free and are, therefore, now taxable.
In mid-September, the stock of Amazon.com, Inc. (AMZN) is selling for $147.A January call option on the stock is selling for $6.10 and has a strike price of $160. This call option is:
A. at the money.
B. in the money.
C. out of the money.
D. overpriced. No one should pay $6.10 for the right to buy a share of stock for $160 when its current market price is only $147.
Answer : C
Explanation:
If Amazon.com is selling for $147 and the strike price on the option is $160, the call option is said to be out of the money since, even if an investor were given the option free, he would not benefit from exercising it at this time. If he did so, he would be paying $160 for a stock that is selling for only $147 on the open market. Even so, the option is not necessarily overpriced at $6.10 because the option has what is known as time value on it. The stock of Amazon.com has several months during which it could rise well above the $160 strike price on the option.
Tex Payor owns 500 shares of Amazon.com, Inc. that he bought seven years ago when the stock price was $18 a share, at which time he paid a commission of $12.95 to purchase the stock. At the beginning of this year, Amazon was selling for $89 a share. Today, December
31st, Amazons stock closed at $152 a share.
Based on this information, what must Tex include on this years tax return as taxable income from his investment in Amazon?
A. only the capital appreciation on the stock this year: $63 a share x 500 shares = $31,500
B. the value of the stock on December 31st minus the price he paid for it, which includes the commission he paid, divided by the 7 years he has owned the stock: $152 - ($18 + $12.95) x 500 shares = $60,525 7 = $8,646
C. the capital appreciation on the stock this year minus the commission he originally paid to purchase the stock:($63 - $12.95) x 500 = $25,025
D. none of the above
Answer : D
Explanation:
None of the selections is the amount that Tex must include as taxable income on this years tax return from his investment in Amazon. Until Tex sells his shares of Amazon.com, he has earned only unrealized capital gains, which are not subject to taxation. When Tex sells his shares, he will then have realized capital gains and must pay tax on those gains.
The total of a mutual fund’s front-end load, rear-end load, and 12b-1 fees may not exceed:
A. 10.0% of the fund’s offer price.
B. 10.0% of the fund’s net asset value.
C. 8.5% of the fund’s offer price.
D. 8.5% of the average annual net assets of the fund.
Answer : C
Explanation:
The total of a mutual funds front-end load, rear-end load, and 12b-1 fees may not exceed
8.5% of the funds offer price
NASDAQ is:
A. an acronym for Norway’s major stock exchange.
B. the government organization that insures accounts at U.S. brokerage firms.
C. a computerized system that links together the U.S. regional exchanges.
D. a computerized quotation system used in the over-the-counter market.
Answer : D
Explanation:
NASDAQ is a computerized quotation system that is used in the over-the-counter market. It allows NASDAQ market makers to enter bid and ask quotes and allows subscribers at lower levels to view the bid and ask quotes av