FINRA Series 54 - Pauline - Quiz 3.new
Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
certdemy practice questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
Which of the following is generally subject to regulation and professional standards, including independence requirements?
Correct
Under the final rule for Registration of Municipal Advisors, both audit and other attest services are subject to regulation and professional standards which include the independence requirements. These independence requirements have a potential conflict with the fiduciary duty of municipal advisors to the municipal entities they advise. A professional who is required to meet general standards regarding the proficiency, adequate knowledge of the subject matter, suitability and availability of criteria, and the exercise of due professional care is the accountant. These attest services exemplify the types of services performed by the accountants according to what the Commission believes.
Incorrect
Under the final rule for Registration of Municipal Advisors, both audit and other attest services are subject to regulation and professional standards which include the independence requirements. These independence requirements have a potential conflict with the fiduciary duty of municipal advisors to the municipal entities they advise. A professional who is required to meet general standards regarding the proficiency, adequate knowledge of the subject matter, suitability and availability of criteria, and the exercise of due professional care is the accountant. These attest services exemplify the types of services performed by the accountants according to what the Commission believes.
-
Question 2 of 10
2. Question
According to the Commission, what is the registration requirement for a person providing non-attest services?
Correct
The Commission stated not to include non-attest services in the accountant exemptions. Nevertheless, in the registration, a person who provides these non-attest services shall register as a municipal advisor only if such services are within the scope of the municipal advisory activities definition. Their services are neither necessarily provided by certified public accountants, nor subject to similar regulation and professional standards as attest services. Their services include tax services and advice relating to GAAP. This includes arbitrage rebate services.
Incorrect
The Commission stated not to include non-attest services in the accountant exemptions. Nevertheless, in the registration, a person who provides these non-attest services shall register as a municipal advisor only if such services are within the scope of the municipal advisory activities definition. Their services are neither necessarily provided by certified public accountants, nor subject to similar regulation and professional standards as attest services. Their services include tax services and advice relating to GAAP. This includes arbitrage rebate services.
-
Question 3 of 10
3. Question
Which of the following is correct regarding the exclusion for underwriters from the definition of municipal advisor?
Correct
According to the final rule for Registration of Municipal Advisors, the underwriters’ exclusion from municipal advisor’s definition is limited to activities that are within the scope of the underwriting of a particular issuance of municipal securities. For this purpose, serving as an underwriter on a particular issuance of municipal securities functions to be more circumscribed and encompasses services on a particular transaction during a time frame narrower than the overall focus of its definition. This includes a broader focus and a longer time frame as discussed in this rule.
Incorrect
According to the final rule for Registration of Municipal Advisors, the underwriters’ exclusion from municipal advisor’s definition is limited to activities that are within the scope of the underwriting of a particular issuance of municipal securities. For this purpose, serving as an underwriter on a particular issuance of municipal securities functions to be more circumscribed and encompasses services on a particular transaction during a time frame narrower than the overall focus of its definition. This includes a broader focus and a longer time frame as discussed in this rule.
-
Question 4 of 10
4. Question
Which of the following is included in the investment strategies according to the Registration of Municipal Advisors?
Correct
Under the Exchange Act Section 15B, the “investment strategies” is stated to include plans or programs for the investment of the proceeds of municipal securities that are not municipal derivatives, guaranteed investment contracts, and the recommendation and brokerage of municipal escrow investments. The Commission’s proposal is to define this term without limitation in including pools of assets that invest any other funds held by a municipal entity or on behalf of a municipal entity.
Incorrect
Under the Exchange Act Section 15B, the “investment strategies” is stated to include plans or programs for the investment of the proceeds of municipal securities that are not municipal derivatives, guaranteed investment contracts, and the recommendation and brokerage of municipal escrow investments. The Commission’s proposal is to define this term without limitation in including pools of assets that invest any other funds held by a municipal entity or on behalf of a municipal entity.
-
Question 5 of 10
5. Question
Which of the following is included in interpreting the term “investment strategies” under Section 15B of the Exchange Act?
Correct
Under the Section 15B of the Exchange Act, the recommendation of and brokerage of municipal escrow investments is included in the term “investment strategies”, however, the term “municipal escrow investments” is not defined in the said section. The municipal escrow investments are used in investment strategies, such as holding proceeds of municipal securities pending deployment. Different commenters have defined this term differently where there is a narrower meaning behind “proceeds of municipal securities” and is limited to investments held in an escrow account.
Incorrect
Under the Section 15B of the Exchange Act, the recommendation of and brokerage of municipal escrow investments is included in the term “investment strategies”, however, the term “municipal escrow investments” is not defined in the said section. The municipal escrow investments are used in investment strategies, such as holding proceeds of municipal securities pending deployment. Different commenters have defined this term differently where there is a narrower meaning behind “proceeds of municipal securities” and is limited to investments held in an escrow account.
-
Question 6 of 10
6. Question
Which of the following is within the definition of “proceeds of municipal securities” as defined by the Commission?
I. Monies derived by a municipal entity from the sale of municipal securities
II. Investment income derived from the investment or reinvestment of such monies
III. Investment income not deriving from investment or reinvestment of such funds
IV. Any monies of a municipal entity or obligated person held in funds under legal documents for the municipal securitiesCorrect
According to the final rule for the Registration of Municipal Advisors, the following are included within the definition of “proceeds of municipal securities”: (1) investment income derived from the investment or reinvestment of such monies in such funds, (2) any monies of a municipal entity or obligated person held in funds under legal documents for the municipal securities provided that it is reasonably expected to be used as a source of payment for the payment of the debt services on the municipal securities (such as the reserves, sinking funds, and pledged funds), and (3) the monies derived by a municipal entity from the sale of municipal securities.
Incorrect
According to the final rule for the Registration of Municipal Advisors, the following are included within the definition of “proceeds of municipal securities”: (1) investment income derived from the investment or reinvestment of such monies in such funds, (2) any monies of a municipal entity or obligated person held in funds under legal documents for the municipal securities provided that it is reasonably expected to be used as a source of payment for the payment of the debt services on the municipal securities (such as the reserves, sinking funds, and pledged funds), and (3) the monies derived by a municipal entity from the sale of municipal securities.
-
Question 7 of 10
7. Question
Which of the following is excluded from the “investment advice” as stated under Section 15B of the Exchange Act?
I. Advice concerning whether and how to issue municipal securities
II. Advice concerning the structure, timing, and terms of issuances of municipal securities and other similar matters
III. Advice concerning municipal derivatives
IV. Advice concerning solicitation of a municipal entity or obligated personCorrect
Under the Section 15B of the Exchange Act, investment advice excludes the following advice in its scope concerning: (1) whether and how to issue municipal securities, (2) the structure, timing, and terms of issuances of municipal securities and other similar matters, and (3) municipal derivatives. This does not cover the solicitation of a municipal entity or obligated person as an exclusion. The Commission believes that the interpretations of the investment advisor exclusion apply to this term.
Incorrect
Under the Section 15B of the Exchange Act, investment advice excludes the following advice in its scope concerning: (1) whether and how to issue municipal securities, (2) the structure, timing, and terms of issuances of municipal securities and other similar matters, and (3) municipal derivatives. This does not cover the solicitation of a municipal entity or obligated person as an exclusion. The Commission believes that the interpretations of the investment advisor exclusion apply to this term.
-
Question 8 of 10
8. Question
When shall the sale of a security to a municipal entity or obligated person constitute a municipal advisory activity?
I. If the proceeds of municipal securities did not produce the monies to purchase such securities
II. If the monies used to purchase such securities are proceeds of municipal securities
III. If there are no recommendations by the broker-dealer about which securities must be purchased or sold.
IV. If in executing such a transaction, the broker-dealer offers advice to the municipal entity about which securities must be purchased or soldCorrect
Under the final rule of the Registration of Municipal Advisors, the sale of a security to a municipal entity or obligated person constitutes a municipal advisory in the following cases: (1) if the monies used to purchase such security are proceeds of municipal securities, and (2) if the broker-dealer offers advice to the municipal entity about which securities to purchase or sell, or they recommended the investment. With this, the broker-dealer that affects a transaction that was not recommended is not considered a “municipal advisor” with respect to such activity.
Incorrect
Under the final rule of the Registration of Municipal Advisors, the sale of a security to a municipal entity or obligated person constitutes a municipal advisory in the following cases: (1) if the monies used to purchase such security are proceeds of municipal securities, and (2) if the broker-dealer offers advice to the municipal entity about which securities to purchase or sell, or they recommended the investment. With this, the broker-dealer that affects a transaction that was not recommended is not considered a “municipal advisor” with respect to such activity.
-
Question 9 of 10
9. Question
Which of the following activities are outside the scope of the underwriter exclusion?
I. Advice on investment strategies
II. Advice on municipal securities, including derivative valuation services
III. Advice on what method of sale a municipal entity should use for issuance of municipal securities
IV. Advice that is specific to a particular issuance of municipal securities on which a person is serving as underwriterCorrect
As stated by the Commission, the following activities that are identified by the commenters are outside the scope of the underwriter exclusion: (1) advice on investment strategies, (2) advice on municipal derivatives, including derivative valuation services, (3) advice on what method of sale is used in issuing municipal security, and (4) advice that is not specific to a particular issuance of municipal securities wherein such person serves as the underwriter involving analysis or strategic services. This includes overall financing options, debt capacity constraints, debt portfolio impacts, analysis of effects of debt or expenditures which are under the various economic assumptions, or other impacts of financing capital projects or working capital.
Incorrect
As stated by the Commission, the following activities that are identified by the commenters are outside the scope of the underwriter exclusion: (1) advice on investment strategies, (2) advice on municipal derivatives, including derivative valuation services, (3) advice on what method of sale is used in issuing municipal security, and (4) advice that is not specific to a particular issuance of municipal securities wherein such person serves as the underwriter involving analysis or strategic services. This includes overall financing options, debt capacity constraints, debt portfolio impacts, analysis of effects of debt or expenditures which are under the various economic assumptions, or other impacts of financing capital projects or working capital.
-
Question 10 of 10
10. Question
Which of the following are outside the scope of underwriting exclusion as considered by the Commission?
I. Advice on overall financial controls that are related to a particular issuance of municipal securities on which a person serves as an underwriter
II. Preparation of financial feasibility analyses with respect to new projects
III. Advice regarding the terms of requests for proposals or requests for qualification for the selection of underwriters
IV. Advice on an overall rating strategy that is not related to a particular issuance of municipal securitiesCorrect
Under the Section 15B of the Exchange Act, the following are outside the scope of the exclusion for underwriters: (1) preparation of financial feasibility analysis, (2) advice on terms of requests for proposals and for qualification for underwriters, and (3) advice no an overall rating strategy that is not related to a particular issuance of municipal securities on which a person serves as an underwriter. This includes advice and actions taken on behalf of a municipal entity or obligated person between financing transactions.
Incorrect
Under the Section 15B of the Exchange Act, the following are outside the scope of the exclusion for underwriters: (1) preparation of financial feasibility analysis, (2) advice on terms of requests for proposals and for qualification for underwriters, and (3) advice no an overall rating strategy that is not related to a particular issuance of municipal securities on which a person serves as an underwriter. This includes advice and actions taken on behalf of a municipal entity or obligated person between financing transactions.