10th Set

Question 1

Are contributions to a 529 plan tax deductible?

Answer 1

No

Question 2

Sovereign debt

Answer 2

Debt issued by national governments >Example: US treasuries

Question 3

Eurodollar bond

Answer 3

Issued by foreign entity but denominated in USD

Question 4

Tender offers must be open for how many business days from the first publication of the offer?

Answer 4

20 business days “If the terms are changed, the offer must be open for at least 10 business days from the date of change but never for less the original 20 business days.”

Question 5

T/F: Tatical asset allocation attempts tp capitalize on short term market swings

Answer 5

True short term swings “Tactical asset allocation, which attempts to capitalize on short-term market swings, is a market timing strategy.”

Question 6

The term high-yield bond would apply to a bond with a Moody’s rating of ____

Answer 6

Ba >same as S&P BB rating >below rating of “High-yield bonds are those whose ratings fall below investment grade. Investment grade is the top four. Using Moody’s descriptions, ratings run from Aaa to Aa to A to Baa to Ba to B and then below. The first rating below the top four is Ba. That is equivalent to a BB rating from Standard & Poor’s (but the question asks specifically about Moody’s).”

Question 7

On a muni bond trade is the ID of the contra broker needed on the confirmation?

Answer 7

No >Not needed >But have to state that name is available upon request

Question 8

A municipal firm acts in an agency capacity to execute a purchase order for a customer. All of the following are required to be on the customer’s confirmation of purchase except A) a description of the securities. B) the identity of the contra broker. C) the capacity of the broker-dealer. D) the settlement date.

Answer 8

B) ID of Contra broker >Don’t need contra broker on muni confirmation >Just have to say name is available upon request “The identity of the contra party (the other side of the trade) is not necessary, as long as it is stated that the name is available upon request.”

Question 9

Are jumbo CDs part of the money market or capital market

Answer 9

money market

Question 10

T/F: partial execution is allowed in an immediate or cancel (IOC) order type

Answer 10

True Immediate or cancel doesn’t have to be filled all the way

Question 11

Are contributions to 529 plan (education savings) tax deductible?

Answer 11

No

Question 12

T/F: Tactical asset allocation is a market timing strategy

Answer 12

True Tactical asset allocation, which attempts to capitalize on short-term market swings, is a market timing strategy.

Question 13

A bond below what S&P rating would be considered speculative

Answer 13

BBB >BBB is the lowest “investment grade” >below that is speculative

Question 14

A summary statement of all interest and dividends credited to a customer’s account must be sent to the primary accountholder each year in ____

Answer 14

January >Firms send IRS Form 1099 in Jan >Customer uses for tax return

Question 15

YTM is another word for

Answer 15

BASIS FUCKING BASIS!!!!!!!

Question 16

Basis means ____

Answer 16

YIELD TO MATURITY!~!!@1 BASIS MEAN YTM!!!!! DA FUQ!!!!!

Question 17

.

MSRB classifies municipal securities into two categories: notes and bonds. They define bonds as any municipal debt security with a maturity of

A)

1 year or more.

B)

2 years or more.

C)

5 years or more.

D)

10 years or more.

Answer 17

c) 5 years or more

Explanation

Municipal notes have a maximum maturity of less than five years. Once the municipal security is issued with a maturity of 5 years or longer, it is considered a municipal bond.

LO 6.b