Supplemental Exam 1

Question 1

According to the IA Act of 1940, a federal covered adviser must maintain and preserve its articles of incorporation and stock certificate books for:

Answer 1

Three years after the termination of the firm

Question 2

What would decrease the future earnings per share of a company?

Answer 2

Issuing convertible debt

Question 3

What is NOT included in the equity section of a balance sheet?

Answer 3

Long term bonds

Question 4

Which mutual fund share class assesses a back end load?

Answer 4

Class B

Question 5

An ERISA qualified plans investment policy statement does NOT include:

Answer 5

Tax treatment of the invested assets

Question 6

Comparable to non callable bonds, callable bonds typically have:

Answer 6

Higher coupons

Question 7

What’s the highest rating for a HIGH YIELD bond?

Answer 7

BB

Question 8

What characteristic of the convertible bond is the same as a non-convertible bond?

Answer 8

Priority in BK

Question 9

What’s the purpose of ERISA?

Answer 9

To prevent the abuse and misuse of pension funds

Question 10

What does the Sharpe ratio measure?

Answer 10

The excess return received for extra volatility endured by holding a riskier asset.

Question 11

What’s the purpose of QDROs?

Answer 11

To split a retirement plan or pension plan