MOCK TEST 5

Question 1

9 Which company has an actively managed portfolio?

Answer 1

Closed-ended company

Question 2

11 Which Act provides the legal framework for the registration of securities at the state level?

Answer 2

Uniform Securities Act

Question 3

Stagnation

Answer 3

prolonged periods of slow or little economic growth accompanied by high unemployment

Question 4

Stagflation

Question 5

Which of the following accurately characterizes capital risk?
A: It is the potential for loss due to an issuer’s financial strength
B: It is always high when investigating in government securities.
C: Is is minimal when investing in derivatives, such as options
D: It can be reduced by diversification

Answer 5

D

Question 6

Which act is the federal law requiring companies offering public equity or debt securities to provide a prospectus to investors?

Question 7

A broker-dealer that executes trades and settles transactions for another broker-dealer is a?

Question 8

Which type of preferred stock would pay the highest dividend rate?

Answer 8

Callable

Question 9

In order for a business entity to qualify as a limited partnership, the LP must have:

Answer 9

at least one general partner and one limited partner

Question 10

A market order would be filled at what price if the market price of the stock is 40?

Answer 10

The next available price

Question 11

Companies in defensive industries would be the manufactures of:
A: Armored personnel carriers 
B: Fighter Jets
C: Pharmaceuticals
D: Automobiles

Answer 11

C

Question 12

Selling and holding of Restricted (unregistered) stock VS. Non restricted stocks
held by affiliates and non affiliates.

Question 13

For a U4 registration do you have to list a misdemeanor that is non financial related I.e. Dui and are you subject to statutory disqualification

Answer 13

No reporting on U4 necessary and not subject to disqualification

Question 14

Two years ago Lisa Smith sold short 100 shares at $50 per share and two years later bought them back for $55 per share. The stock paid a $2.50 dividend each year. How much did Smith gain or lose per share for tax purposes?
A: $5 gain
B: No gain or loss
C: $10 gain
D: $5 loss

Answer 14

D When calculating gains and losses for tax purposes dividends are not included in the calculations. So since she sold them for $50 and bought them for $55 that would be a $5 loss

Question 15

When the grantor has to give up ownership of items placed in the trust, but the structure of the trust may reduce estate taxes, this is describing a:

Answer 15

Irrevocable Trust

Question 16

What is a Introducing/Fully Disclosed Firm

Answer 16

A firm that chooses to introduce it’s customers’ business to another firm to clear and process transactions, as well as handle all back-office tasks such as sending trade confirmations and taking custody of customer funds and securities

Question 17

What is a carrying firm?

Answer 17

A firm that receives business from a Introducing firm/Fully disclosed firm to do all back office work and retain customers funds and securities

Question 18

Benefits of an Exchange-traded Fund (ETF) over a mutual fund:

Answer 18

• Intraday pricing for active traders
• The ability to buy on margin
• lower operating cost than many mutual funds

Question 19

Which class of shares use a CDSC as the main sales charge?

Answer 19

Class B shares

Question 20

What is a Municipal Finance Professional (MFP)

Answer 20

an employee of a Financial Industry Regulatory Authority (FINRA) member engaged in municipal security representative activities such as underwriting and trading