Exam Review Q's

Question 1

When can a BD exercise discresion in a customers account?

Answer 1

Only after receiving written auth or a not-held order

Question 2

When can a IA exercise discresion in a customers account?

Answer 2

Can use verbal for 10 days, but msut use written after

Question 3

Who are 403(b) Plan for?

Answer 3

Established by non-profit and public schools
Tax-deductable and tax deffered

Question 4

What changes can be made to a 529 Plan?

Answer 4

May set up a new and seperate 529
Roll over the fund into another states 529 plan (Allowed once every 12 months)

Question 5

What is Form 13D v 13F?

Answer 5

• Any investor who acquires mroe than 5% of common stock of a reporting company must file Form 13D w/ SEC
• Intitutuion investment managers that exercis inv discretion over $100M in equity securities files form 13F

Question 6

What are swap contracts and their benefits?

Answer 6

• Derivitive contract where parties exchange future cash flows
• Customizable, for the ST or LT, used to hedge

Question 7

What is an Institutional Account?

Answer 7

• Used by organizations such as banks, mutual funds, pension fundsm insurance comanies, IA/s.
• Does not take into account $$$

Question 8

What is the SEC Release 1092 Three-pronged test?

Question 9

What is Form 1041
1065
1040EZ

Answer 9

• Trustee reports all income, gains, and losses of a trust to the IRS
• Informational return by partnerships
• Ind or jt filing w/ less than $100k in taxable income

Question 10

What is a Sovereign Bond?

Answer 10

• Issued by a foreign government and pays in home currency

Question 11

What increases a partners basis in an LP?

Answer 11

• An Assesment, which requires additional contribution

Question 12

Who is a performace based fee permitted for?

Answer 12

• Qualified clients w/ at least $1.1M AUM or Net Work greater than $2.2M

Question 13

What is a certifacate of incumbency?

Answer 13

• Court issued document that provides legal authority of a court-appointed gaurdian to act on behalf of another person

Question 14

What are the charactoristics of a simple trust?

Answer 14

• Must distrubute all income to beneficiaries in the year it is received

Question 15

When are singular or irregular withdraws from a non-qualified annuity taxed?

Answer 15

LIFO Method

Question 16

What is a revolving credit facility?

Answer 16

• Operating line, bank line, or revolver. Allows for a corporation to borrow from a bank

Question 17

Rule 506c vs 506d

Answer 17

• Permits advertising and can only sell to accredited investors
• Does not permit advertising, sell to max 35 non accredited investors

Question 18

Under the USA Act, If an agent unknowingly sells securites in violation, what is the SOL?

Answer 18

• 3 years of occurance or 2 years of discovery, whichever comes first

Question 19

When is an ommitting or summary prospectus allowed?

Answer 19

• When selling IC securities and variable products

Question 20

What is IRMAA?

Answer 20

• Income-related monthly adjustment amounts (IRMAA)
• Increases medicare premiums forIdv who earn over a specific amount

Question 21

When may an agent of a BD accept a loan?

Answer 21

• May borrow from certain clients such as immediate family members, clients in the business of lending, or personal relationship outside the firm