44%of Test Investment Products And Their Risks

Question 1

Which the following is true for debt instruments issued by the US treasury

Answer 1

All are issued in book entry form

Question 2

3. Hedge funds

Answer 2

Or non-regulated with no SEC registration required

Question 3

6. Once a dividend is initially declared by the Board of Directors any future dividend payments

Answer 3

Carry no guarantee of payment in any amount

Question 4

10. US government securities are

Answer 4

Issued by the US treasury inbook entry form

Question 5

16. And investor owns a bond purchased several years ago during 3%, which at the time was considered a fair return however he’s fixed 3% interest payments have not kept up with inflation rate the situation presents the investor with

Answer 5

Purchasing power risk

Question 6

19. Limited partnership programs are categorized as direct participation programs the term direct participation refers to the

Answer 6

Flow through profits and losses of the partnership to the individual limited partners

Question 7

20. A change to tax rate on dividends would be an example of

Answer 7

Legislative risk

Question 8

25. Investors face many different risks which of the following would be factors of systematic risk

Answer 8

War

And

Global security threats

Question 9

42. An investor anticipates that a fall in interest rates is eminent this investor not wanting to purchase bonds in order to lock in an interest income would likely buy

Answer 9

Non callable bonds

Question 10

44. Are purchased at a discount

Answer 10

T-bills

Question 11

Purchased as a percentage of par

Answer 11

T-bonds

Question 12

A municipality wants to issue GO bonds that will put it over it statutory limit they may do so as long as they have

Answer 12

Voter approval

Question 13

T-notes pay interest

Answer 13

Semi annually

Question 14

Penny stocks need what without what?

Answer 14

Risk disclosure

Without Suitability statement

Question 15

48. Bond prices have an inverse relationship to

Answer 15

Interest rates

Question 16

A mutual fund has been in existence for 25 years . The prospectus must disclose the funds performance

Answer 16

Over the last 1, 5, and 10 years

Question 17

LGIPs

Answer 17

Are not required to register with the SEC

Need no prospectus

What do you provide information statements which include details of the management fees

Question 18

In bankruptcy proceedings courts protect both

Answer 18

Corporate and individual filers from creditors

Question 19

52. LGIPs are

Answer 19

Local government investment pools

Securities that are established for states to provide other government entities and short term investment

Question 20

55. The time to maturity for debt instruments

Answer 20

Can be any length of time

Question 21

60. A call or put that can be exercise before expiration is a

Answer 21

American style option

Question 22

Federal funds may be loaned from

Answer 22

One FRB MEMBER BANK TO ANOTHER

Question 23

64. Intangible drilling costs are

Answer 23

Cost for those items that would have no salvage value at the end of the program

Question 24

65. When investing in overseas markets in foreign securities investors should be aware of and understand

Answer 24

Currency risk

Question 25

69. A restricted person would be allowed to purchase new shares at public offering price if only

Answer 25

The interest does not exceed 10%

Question 26

70. Collateral trust bond

Answer 26

Corporate bonds back by the securities of other corporations

Question 27

74. An income bond is

Answer 27

And adjustment bond and is unsecured

Question 28

75. An individual owning shares of the corporation common stock would not be allowed to

Answer 28

Declare dividends

Question 29

76. Serial maturity bonds

Answer 29

Are issued at one time and mature in successive years

Question 30

Is fixed at the time of a bond is issued

Answer 30

Nominal yield

Question 31

79. A Shareholder owns preferred shares that allow for the possibility of receiving more than the stated dividend

Answer 31

Participating

Question 32

81. If an investor is long an option contract and wishes to exercise the contract

Answer 32

Then the investor must notify the BD, then the BD must notify the OCC

Question 33

The decision to pay a dividend rests with

Answer 33

The BOD but is not guaranteed

Question 34

When a bond is priced at par value

Answer 34

It is trading at a premium

Question 35

86. What two risks is an investor avoiding if their portfolio is made up of U.S. securities only

Answer 35

Political and currency

Question 36

89. Revenue bonds are

Answer 36

Self supporting

Question 37

89. GO Bonds are

Answer 37

Backed by the municipality’s good faith and credit

Question 38

Priority at dissolution for preferred shareholders means

Answer 38

After all creditors And Before common shareholders

Question 39

94. Order of payment at the time of a corporate liquidation

Answer 39

1. Employee wages and taxes owed 2. Secured debt holders 3. Subordinated debentures 4. Preferred stock

Question 40

When a corporation issues a mortgage bond, the issues total value

Answer 40

Should be less than that of the real estate it is backed by

Question 41

Commercial paper is

Answer 41

Unsecured debt with a maximum maturity of 9 months

Question 42

For restricted stock or unregistered stock held by an affiliate or inside her which the following applies

Answer 42

Six month holding period With volume limits there after

Question 43

72. When an investor purchases a corporate bond the investor it is

Answer 43

Lending money to and becoming a creditor of the corporation

Question 44

56. A hedge fund portfolio has been characterized as being highly leveraged(borrowing to purchase) this means??

Answer 44

There is substantial borrowing or purchasing on margin

Question 45

57. The coupon payable on a bond may also be referred to as

Answer 45

The stated or nominal yield

Question 46

58. Yield to call (YTC) calculations reflected early redemption date and

Answer 46

Acceleration of the discount gain if the bond was originally purchased at a discount & Accelerated premium loss if the bond is originally purchased at a premium

Question 47

59. Corporate Debentures are what?

Answer 47

Unsecured bonds backed by the good faith and credit of the issuing corporation & They are not secured by any underlying collateral

Question 48

27. Under the provisional rule of 144, what percentage of outstanding stock may a control person sell every 90 days??

Answer 48

1%

Question 49

30. Open-end investment companies trade new shares how much how often??

Answer 49

Unlimited & Continuously

Question 50

30. Closed-end investment companies trade new shares how much how often?

Answer 50

Number of shares are fixed and once the IPO is over, the only way to acquire shares is in the secondary market

Question 51

30. Both types of funds may operate as regulated investment companies and avoid taxation, both may choose to be diversified or not, and both offer a wide variety of investment objectives. What two types of funds fit this description??

Answer 51

Closed-end and Open-end