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Question 1 of 10
1. Question
Which of the following statement is true about Adjustable or Floating Rate Preferred Stock?
Adjustable or Floating Rate Preferred Stock is-Correct
Adjustable or Floating Rate Preferred Stock: A type of preferred stock where the dividend rate of stock is reset every six months in line with market interest rates.
Incorrect
Adjustable or Floating Rate Preferred Stock: A type of preferred stock where the dividend rate of stock is reset every six months in line with market interest rates.
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Question 2 of 10
2. Question
Which of the following statement(s) is(are) true about Z-Tranches?
I. Z-Tranches are created as support until the CMO retires.
II. Z- Tranches are the last tranches remaining in a CMO.
III. Z-Tranches do not receive interest
IV. Z-Tranches are bought at a discount and reach their full value at maturity.Correct
Z-Tranches: These tranches are created as support until the CMO retires. Z- tranches are the last tranches remaining in a CMO. These tranches do not receive interest, but are bought at a discount and reach their full value at maturity.
Incorrect
Z-Tranches: These tranches are created as support until the CMO retires. Z- tranches are the last tranches remaining in a CMO. These tranches do not receive interest, but are bought at a discount and reach their full value at maturity.
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Question 3 of 10
3. Question
George Jones is part of a syndicate group of five underwriters. The group commits to 1,000,000 shares. He has sold his share of 200,000 shares. 100,000 shares remain unsold. Under an Eastern Account-
Correct
George Jones is part of a syndicate group of five underwriters. The group commits to 1,000,000 shares. He has sold his share of 200,000 shares. 100,000 shares remain unsold. Under an Eastern Account-
I. he would be responsible for selling another 20,000 shares
II. he would have met his obligation to the syndicate by selling his portion of the total shares, with no commitment to the unsold shares.
III. he would be responsible for selling another 10,000 shares
IV. he would be responsible for selling another 100,000 sharesSyndicate agreements are either Eastern Accounts, where responsibility for sales is shared between members.
(100,000 divided by five members).Incorrect
George Jones is part of a syndicate group of five underwriters. The group commits to 1,000,000 shares. He has sold his share of 200,000 shares. 100,000 shares remain unsold. Under an Eastern Account-
I. he would be responsible for selling another 20,000 shares
II. he would have met his obligation to the syndicate by selling his portion of the total shares, with no commitment to the unsold shares.
III. he would be responsible for selling another 10,000 shares
IV. he would be responsible for selling another 100,000 sharesSyndicate agreements are either Eastern Accounts, where responsibility for sales is shared between members.
(100,000 divided by five members). -
Question 4 of 10
4. Question
Which of the followings are the steps in registering securities?
I. Issuance of the preliminary prospectus, or red herring, to give potential investors more information about the upcoming offering
II. Forming the underwriting group or syndicate.
III. Issuing company and underwriters meet to formalize agreements regarding the issue. This is known as a due diligence meeting.
IV. Meeting “Blue Sky Laws” requirements.Correct
The six steps in registering securities are:
1.Registering with Securities and Exchange Commission (SEC) with the name of the corporation, business description, officer information, and capitalization
2.Issuance of the preliminary prospectus, or red herring, to give potential investors more information about the upcoming offering
3.Forming the underwriting group or syndicate.
4.Issuing company and underwriters meet to formalize agreements regarding the issue. This is known as a due diligence meeting
5.Meeting “Blue Sky Laws” requirements. The corporation will register with the state(s)
6.Public Offering, with final prospectusIncorrect
The six steps in registering securities are:
1.Registering with Securities and Exchange Commission (SEC) with the name of the corporation, business description, officer information, and capitalization
2.Issuance of the preliminary prospectus, or red herring, to give potential investors more information about the upcoming offering
3.Forming the underwriting group or syndicate.
4.Issuing company and underwriters meet to formalize agreements regarding the issue. This is known as a due diligence meeting
5.Meeting “Blue Sky Laws” requirements. The corporation will register with the state(s)
6.Public Offering, with final prospectus -
Question 5 of 10
5. Question
Which of the following particulars are required to register with Securities and Exchange Commission (SEC)?
I. The name of the corporation
II. Business description
III. Officer information
IV. CapitalizationCorrect
Registering with Securities and Exchange Commission (SEC) with the name of the corporation, business description, officer information, and capitalization.
Incorrect
Registering with Securities and Exchange Commission (SEC) with the name of the corporation, business description, officer information, and capitalization.
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Question 6 of 10
6. Question
Within how many days following the termination of an associated person, a member must give notice of the termination to FINRA?
Correct
Within 30 days following the termination of an associated person, a member must give notice of the termination to FINRA.
Incorrect
Within 30 days following the termination of an associated person, a member must give notice of the termination to FINRA.
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Question 7 of 10
7. Question
Which of the following statement(s) is (are) true about the definition of a regulated investment company as provided by Section 851 of the Internal Revenue Code?
A regulated investment company is defined as a company that:
I. Files each year with its tax return an election to be considered a regulated investment company.
II. Has at least 90 percent of its income derived from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock of securities or net income derived from an interest in a qualified publicly traded partnership.
III. Has at least 50 percent of its income derived from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock of securities or net income derived from an interest in a qualified publicly traded partnership.
IV. At the close of each quarter has at least 90 percent of its taxable assets represented by cash, government securities, and securities of other regulated investment companies, and all other securities are limited to having not more than 5 percent represented by any one issuerCorrect
As provided by Section 851 of the Internal Revenue Code, a regulated investment company is defined as a company that:
1. Files each year with its tax return an election to be considered a regulated investment company
2. Has at least 90 percent of its income derived from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock of securities or net income derived from an interest in a qualified publicly traded partnership
3. At the close of each quarter has at least 50 percent of its taxable assets represented by cash, government securities, and securities of other regulated investment companies, and all other securities are limited to having not more than 5 percent represented by any one issuerIncorrect
As provided by Section 851 of the Internal Revenue Code, a regulated investment company is defined as a company that:
1. Files each year with its tax return an election to be considered a regulated investment company
2. Has at least 90 percent of its income derived from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock of securities or net income derived from an interest in a qualified publicly traded partnership
3. At the close of each quarter has at least 50 percent of its taxable assets represented by cash, government securities, and securities of other regulated investment companies, and all other securities are limited to having not more than 5 percent represented by any one issuer -
Question 8 of 10
8. Question
If the regulated investment company pays a dividend but has no earnings and profits in a given year, the dividend is treated as a-
Correct
If the regulated investment company pays a dividend but has no earnings and profits in a given year, the dividend is treated as a non-taxable return of capital, which will reduce a shareholder’s cost basis.
Incorrect
If the regulated investment company pays a dividend but has no earnings and profits in a given year, the dividend is treated as a non-taxable return of capital, which will reduce a shareholder’s cost basis.
-
Question 9 of 10
9. Question
Which of the following circumstance(s) is(are)are provided by NASD Rule 1060, under which a person associated with a member may be exempt from registration with the NASD?
I. Persons associated with a member whose functions are solely and exclusively clerical or ministerial;
II. Persons associated with a member who are not actively engaged in the investment banking or securities business;
III. Persons associated with a member whose functions are related solely and exclusively to the member’s need for nominal corporate officers or for capital participation; and
IV. Persons associated with a member whose functions are related solely and exclusively to effecting transactions on the floor of a national securities exchange.Correct
NASD Rule 1060 provides for four circumstances under which a person associated with a member may be exempt from registration with the NASD, as follows:
Persons associated with a member whose functions are solely and exclusively clerical or ministerial;
Persons associated with a member who are not actively engaged in the investment banking or securities business;
Persons associated with a member whose functions are related solely and exclusively to the member’s need for nominal corporate officers or for capital participation; and
Persons associated with a member whose functions are related solely and exclusively to effecting transactions on the floor of a national securities exchange.Incorrect
NASD Rule 1060 provides for four circumstances under which a person associated with a member may be exempt from registration with the NASD, as follows:
Persons associated with a member whose functions are solely and exclusively clerical or ministerial;
Persons associated with a member who are not actively engaged in the investment banking or securities business;
Persons associated with a member whose functions are related solely and exclusively to the member’s need for nominal corporate officers or for capital participation; and
Persons associated with a member whose functions are related solely and exclusively to effecting transactions on the floor of a national securities exchange. -
Question 10 of 10
10. Question
According to NASD Rule 1060, persons exempt from registration who are associated with a member whose functions are related solely and exclusively to-
I. effecting transactions on the floor of a national securities exchange and who are registered as floor members with such exchange
II. transactions in municipal securities
III. transactions in commodities
IV. transactions in security futures, provided that any such person is registered with a registered futures associationCorrect
Persons associated with a member whose functions are related solely and exclusively to (i) effecting transactions on the floor of a national securities exchange and who are registered as floor members with such exchange, (ii) transactions in municipal securities, (iii) transactions in commodities, or (iv) transactions in security futures, provided that any such person is registered with a registered futures association.
Incorrect
Persons associated with a member whose functions are related solely and exclusively to (i) effecting transactions on the floor of a national securities exchange and who are registered as floor members with such exchange, (ii) transactions in municipal securities, (iii) transactions in commodities, or (iv) transactions in security futures, provided that any such person is registered with a registered futures association.