Exam 35 Wrong Answers Flashcards
(25 cards)
A technical analyst interprets a reverse head and shoulders formation to be
Reversal of a downward trend
Which of the following describe developmental oil and gas drilling programs?2
Drilling takes place only in proven areas
Return potential is not as great as it is in exploratory drilling
Under Regulation D rule 506, how much money can be raised within 12 months?
An unlimited amount
A municipal securities dealer buys $500,000 of 6% revenue bonds at par. The dealer immediately reoffers the bonds. Under MSRB rules, which two of the following would be considered bona fide quotes under the circumstances described?2
5.8 less 1/2
101
A parent has been using distributions from a 529 plan to pay for her son’s college education. In his spare time and unrelated to his college curriculum, the son decides to start a business and needs $15,000 in seed money. If $15,000 is withdrawn from the 529 plan to cover this business venture, what are the implications?
10% penalty and ordinary income taxes on earnings
A grandfather wants to select an annuity settlement option that will provide the best benefit to both his son and granddaughter. What annuity type would best suit his needs?
Joint and last survivor
Which of the following statements are true regarding the over the counter market?2
The Federal Reserve Board regulates which OTC securities are marginable
FINRA regulates trading practices in the OTC market
A corporation’s capitalization consists of: Debenture - 7% - $1,000 par, maturity 2022: $4,000,000; Common Stock - $1 par, 200,000 shares outstanding: $200,000 Capital in excess of par: $800,000; Retained earnings: $5,000,000. The corporation, for the year 2010 earns $1,500,000 before interest and taxes and is in the 50% tax bracket. What is the return on common equity?
10.2%
All of the following are used to properly evaluate the yield to maturity of a bond investment except
Current price of the bond
Most fund companies will permit shareholders to request an actual certificate, similar to a stock certificate, which proves ownership of the shares, however before those shares can be redeemed
They must be deposited into the account and re evaluated by the fund company
With systematic withdrawal plan, from what source are the first payments made?
Dividends
A mutual fund prospectus can no longer be used if financial information is older than
16 months
A Third Market trade involves
Listed stocks traded over the counter
All of the following are true statements regarding a full arbitration hearings except
The maximum award is $50,000
The purchase of a put has all the following advantages over selling short except
Decreasing time value
Which of the following would be quoted on a bond confirmation when an investor purchases a bond that has been advanced refunded?
Yield to call
What is the lowest price that a seller is willing to accept for a security from a customer?
Ask price
Opening purchase in a margin account with no other positions is 2,000 shares at $2. With Reg T at 50%, what is the minimum deposit required?
$5,000
The syndicator of a limited partnership acts as
The organizer of the partnership responsible for securities registration
CQS transactions involve all of the following except
OTCBB
Which of the following applies to put option contracts?
The put holder has the right to sell at the strike price
How are funds contributed to a tax sheltered annuity treated as taxation?
The contributions are not included as income for the employee, but are taxable upon distribution
A client wishes to open a portfolio margin account. What must be completed prior to opening the account?
Be approved by a designated ROP for uncovered option writing and customer must receive a copy of and sign the risk disclosure document at the time of application or earlier
With regard to a collect on delivery order, what is the proper procedure for the receiving firm should the funds not be available to pay for the securities at delivery?
The receiving firm must promptly return the securities to the selling firm
