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Question 1 of 10
1. Question
Which of the following insured deposit accounts is suitable for retirees?
Correct
Certificates of deposit (CDs) take the form of savings certificates promising the holder of the CD a specific rate of interest. They tend to be ideal investments for retirees who are seeking a safe place to invest their funds without the need for much return.
Incorrect
Certificates of deposit (CDs) take the form of savings certificates promising the holder of the CD a specific rate of interest. They tend to be ideal investments for retirees who are seeking a safe place to invest their funds without the need for much return.
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Question 2 of 10
2. Question
Choose the incorrect statement from options below.
Correct
Money market instruments differ from bonds in that they are subject to a much shorter duration for the debt, specifically less than a year. Because of their short duration and relative safety, money market instruments are very liquid. The two most common and most useful types of money market instruments are commercial paper and Treasury bills, or T-bills.
Incorrect
Money market instruments differ from bonds in that they are subject to a much shorter duration for the debt, specifically less than a year. Because of their short duration and relative safety, money market instruments are very liquid. The two most common and most useful types of money market instruments are commercial paper and Treasury bills, or T-bills.
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Question 3 of 10
3. Question
What is the correct formula for calculating P/E ratio.
Correct
The price-to-earnings, or P/E, ratio helps the investor compare a security’s market value (price per share) to the company’s earnings per share. It is calculated as market value per share/earnings per share. A higher P/E may indicate that investors predict larger earnings in the future than a company with a lower P/E.
Incorrect
The price-to-earnings, or P/E, ratio helps the investor compare a security’s market value (price per share) to the company’s earnings per share. It is calculated as market value per share/earnings per share. A higher P/E may indicate that investors predict larger earnings in the future than a company with a lower P/E.
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Question 4 of 10
4. Question
Regarding price to book ratio, identify the incorrect statement.
Correct
The price-to-book ratio helps investors compare a company’s market value (price per share) to its book value, or a company’s value based on its assets versus liabilities listed on the balance sheet. This ratio is a conservative look at the value of the company versus how much the investor is paying per share. It is calculated as price per share/shareholders’ equity per share.
Incorrect
The price-to-book ratio helps investors compare a company’s market value (price per share) to its book value, or a company’s value based on its assets versus liabilities listed on the balance sheet. This ratio is a conservative look at the value of the company versus how much the investor is paying per share. It is calculated as price per share/shareholders’ equity per share.
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Question 5 of 10
5. Question
Regarding commercial paper, which of the following is false?
Correct
Commercial paper is a money market instrument characterized by a short duration and an unsecured nature. They are loans that large corporations use to finance accounts receivable and inventory. Commercial paper maturities typically go no longer than nine months, with the average maturity being one to two months.
Incorrect
Commercial paper is a money market instrument characterized by a short duration and an unsecured nature. They are loans that large corporations use to finance accounts receivable and inventory. Commercial paper maturities typically go no longer than nine months, with the average maturity being one to two months.
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Question 6 of 10
6. Question
The following are true concerning notice filing, except:
I. It occurs when the issuer provides documents from the Securities Exchange Commission (SEC) filing to the administrator.
II. It does not require documents filed with their SEC registration statements.
III. Registration only occurs after the administrator is supplied with prospectuses in compliance with the Securities Act of 1933.
IV. It occurs when the issuer submits to an application process that includes information regarding the business.Correct
Notice filing occurs when the issuer provides documents from the Securities Exchange Commission (SEC) filing to the administrator. Notice filing requires documents filed with their SEC registration statements, amendments thereto, a relevant valuation of the securities, and consent to service of process.
Incorrect
Notice filing occurs when the issuer provides documents from the Securities Exchange Commission (SEC) filing to the administrator. Notice filing requires documents filed with their SEC registration statements, amendments thereto, a relevant valuation of the securities, and consent to service of process.
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Question 7 of 10
7. Question
Registration by coordination occurs after the administrator is supplied with:
I. prospectuses in compliance with the Securities Act of 1933
II. the issuer’s articles of incorporation
III. bylaws
IV. the underwriting agreement.Correct
Registration by coordination occurs after the administrator is supplied with prospectuses in compliance with the Securities Act of 1933, the issuer’s articles of incorporation, bylaws, and the underwriting agreement.
Incorrect
Registration by coordination occurs after the administrator is supplied with prospectuses in compliance with the Securities Act of 1933, the issuer’s articles of incorporation, bylaws, and the underwriting agreement.
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Question 8 of 10
8. Question
Which of the following statement is true?
I. After the registration of a nonexempt security, the administrator does not have the authority to demand that any amendments to the security be submitted.
II. The registration of the newly issued security is not valid after six months from the date of issuance.
III. If additional shares are issued without significant changes to the security within the period of one year post registration, a new registration is unnecessary.
IV. The registration of the newly issued security is valid for one year after the date of issuance.Correct
After the registration of a nonexempt security, the administrator has the authority to demand that any amendments to the security be submitted in a timely fashion to ensure the maintenance of valid and relevant information regarding the new issuance of the security. The registration of the newly issued security is valid for one year after the date of issuance. If additional shares are issued without significant changes to the security within that period of time, a new registration is unnecessary.
Incorrect
After the registration of a nonexempt security, the administrator has the authority to demand that any amendments to the security be submitted in a timely fashion to ensure the maintenance of valid and relevant information regarding the new issuance of the security. The registration of the newly issued security is valid for one year after the date of issuance. If additional shares are issued without significant changes to the security within that period of time, a new registration is unnecessary.
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Question 9 of 10
9. Question
Which of the following securities are exempt from registration?
I. Securities issued by United States governments and Canadian governments, and guaranteed by those governments.
II. Any security issued and guaranteed by a foreign government that retains a diplomatic status with the United States.
III. Securities that are issued and guaranteed by depository institutions that are privately chartered.
IV. Securities issued and guaranteed by insurance companies.Correct
An exempt security is exempt due to the nature of the issuer. Securities issued by United States governments and Canadian governments, and guaranteed by those governments, are exempt from registration under the Uniform Securities Act (USA). Any security issued and guaranteed by a foreign government that retains a diplomatic status with the United States is also exempt from registration under the USA. They are exempt from registration due to the relationship foreign governments have with the United States and the presumed trustworthiness of those governments. Other exempt securities include those securities that are issued and guaranteed by depository institutions that are federally chartered or authorized to transact business in a given state; securities issued and guaranteed by insurance companies…
Incorrect
An exempt security is exempt due to the nature of the issuer. Securities issued by United States governments and Canadian governments, and guaranteed by those governments, are exempt from registration under the Uniform Securities Act (USA). Any security issued and guaranteed by a foreign government that retains a diplomatic status with the United States is also exempt from registration under the USA. They are exempt from registration due to the relationship foreign governments have with the United States and the presumed trustworthiness of those governments. Other exempt securities include those securities that are issued and guaranteed by depository institutions that are federally chartered or authorized to transact business in a given state; securities issued and guaranteed by insurance companies…
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Question 10 of 10
10. Question
Which of the following statements is true?
I. Federally covered securities such as rights, warrants, debt securities, and preferred stock are exempt securities.
II. Zero coupon bonds generally have long-term maturities ranging from ten to twenty years.
III. Zero coupon bonds have a lower rate of price fluctuations compared to regular bonds.
IV. A broker is a person or institution which acts as a middleman between the buyer of a security and the seller of a security.Correct
Zero coupon bonds are bonds which sell at a discounted price because they do not pay interest. They generally have long-term maturities ranging from ten to twenty years. Also, they have a higher rate of price fluctuation on the open market than regular bonds.
Incorrect
Zero coupon bonds are bonds which sell at a discounted price because they do not pay interest. They generally have long-term maturities ranging from ten to twenty years. Also, they have a higher rate of price fluctuation on the open market than regular bonds.