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Question 1 of 10
1. Question
The following true about yield to maturity Securities EXCEPT:
I. If a bond is purchased at a discount, the yield-to-maturity is greater than the current yield or coupon of the bond.
II. If the bond was purchased at a premium, yield-to-maturity would be greater than the current yield or coupon.
III. If a bond is purchased at a discount, the yield-to-maturity is less than the current yield or coupon of the bond.
IV. If the bond was purchased at a premium, yield-to-maturity would be less than the current yield or coupon.Correct
If a bond is purchased at a discount, the yield-to-maturity is greater than the current yield or coupon of the bond. If the bond was purchased at a premium, yield-to-maturity would be less than the current yield or coupon.
Incorrect
If a bond is purchased at a discount, the yield-to-maturity is greater than the current yield or coupon of the bond. If the bond was purchased at a premium, yield-to-maturity would be less than the current yield or coupon.
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Question 2 of 10
2. Question
Regarding Current Yield, which of the following is true?
I. It is a measurement of the interest or dividends a given security pays compared to the price at which that security is sold.
II. A bond selling at a premium provides a lower yield on investment than the coupon rate.
III. A bond selling at a discount provides a higher yield than the coupon rate.
IV. A bond selling at a premium provides a higher yield on investment than the coupon rate.Correct
A bond selling at a discount provides a higher yield than the coupon rate. A bond selling at a premium provides a lower yield on investment than the coupon rate.
Incorrect
A bond selling at a discount provides a higher yield than the coupon rate. A bond selling at a premium provides a lower yield on investment than the coupon rate.
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Question 3 of 10
3. Question
The following are true about Uniform Security Act EXCEPT:
I. It brings uniformity to multiple states’ laws but also provides for consumer investor protection.
II. Many terms that are often unclear to unsophisticated investors are defined under the Uniform Securities Act, helping those investors make more-informed decisions.
III. All the states securities laws are jointly overseen by an administrator or the office of an administrator.
IV.The administrator, or the office of the administrator, has jurisdiction of all activities that occur in all the states concerning the securities industry.
Correct
Each state’s securities laws are overseen by an administrator. The administrator, or the office of the administrator, has jurisdiction of all activities that occur in the state concerning the securities industry.
Incorrect
Each state’s securities laws are overseen by an administrator. The administrator, or the office of the administrator, has jurisdiction of all activities that occur in the state concerning the securities industry.
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Question 4 of 10
4. Question
Concerning Current yield; which of the undercoated is TRUE?
I. It is an important factor of consideration for those investors seeking income from their portfolios.
II. It allows the investor to determine if the amount of income that they would receive from a potential investment is worth the initial capital outlay
III. It also checks if the capital could be invested to great effect in another investment.
IV. It is also a factor used to check if the investment would yield savings.Correct
Current yield is an important factor of consideration for those investors seeking income from their portfolios. It allows the investor to determine if the amount of income that they would receive from a potential investment is worth the initial capital outlay or if the capital could be invested to great effect in another investment.
Incorrect
Current yield is an important factor of consideration for those investors seeking income from their portfolios. It allows the investor to determine if the amount of income that they would receive from a potential investment is worth the initial capital outlay or if the capital could be invested to great effect in another investment.
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Question 5 of 10
5. Question
Investment advisor applicants must provide the following information to the Securities Exchange Commission (SEC) via notice-filing:
I. Registration statements on file with the SEC
II. Amendments made to those registration statements
III. The value of his securities in the stock market
IV. The amount of value of securities offered in each stateCorrect
Dependent upon the requirements of the administrator, investment advisor applicants must provide the following information to the Securities Exchange Commission (SEC) via notice-filing: registration statements on file with the SEC, amendments made to those registration statements, the amount of value of securities offered in each state, and consent to service of process.
Incorrect
Dependent upon the requirements of the administrator, investment advisor applicants must provide the following information to the Securities Exchange Commission (SEC) via notice-filing: registration statements on file with the SEC, amendments made to those registration statements, the amount of value of securities offered in each state, and consent to service of process.
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Question 6 of 10
6. Question
Following the registration of an investment advisor, the SEC requires that detailed records be kept, including:
I. a journal of transactions of cash in and disbursement out;
II. documentation of orders placed by the advisor and any modifications thereto;
III. records of accounts with discretionary designations;
IV. records of securities transactions in which the investment advisor has some amount of ownershipCorrect
Following the registration of an investment advisor, the Securities Exchange Commission requires that detailed records be kept, including a journal of transactions of cash in and disbursement out; ledgers detailing any expense, liability, reserve, asset, capital, or income accounts; documentation of orders placed by the advisor and any modifications thereto; financial records, bills and statements, original copies of written communication.
Incorrect
Following the registration of an investment advisor, the Securities Exchange Commission requires that detailed records be kept, including a journal of transactions of cash in and disbursement out; ledgers detailing any expense, liability, reserve, asset, capital, or income accounts; documentation of orders placed by the advisor and any modifications thereto; financial records, bills and statements, original copies of written communication.
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Question 7 of 10
7. Question
The following are advantages of the Blue Sky Law, EXCEPT:
I. Uniformity among the states’ law
II. Consumer investor protection
III. Outlines civil and criminal liabilities for abuse of the uniform laws
IV. Guards against the securities of the investment advisorCorrect
*The Uniform Securities Act, or USA, outlines civil and criminal liabilities for abuse of the uniform laws.
*The blue-sky laws not only bring uniformity to multiple states’ laws but also provides for consumer investor protection.Incorrect
*The Uniform Securities Act, or USA, outlines civil and criminal liabilities for abuse of the uniform laws.
*The blue-sky laws not only bring uniformity to multiple states’ laws but also provides for consumer investor protection. -
Question 8 of 10
8. Question
Annualized returns is calculated by:
I. Multiplying the return of a security or portfolio by an annualization factor
II. One year divided by the total number of days the security or portfolio was held
III. Dividing the return of a security or portfolio by an annualization factor
IV. One year multiplied by the total number of days the security or portfolio was heldCorrect
Annualized returns are calculated by multiplying the return of a security or portfolio by an annualization factor, or one year divided by the total number of days the security or portfolio was held.
Incorrect
Annualized returns are calculated by multiplying the return of a security or portfolio by an annualization factor, or one year divided by the total number of days the security or portfolio was held.
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Question 9 of 10
9. Question
Regarding Speculative Derivative, which of the following is true?
I. They trail the path of a great risk
II. It takes the form of selling covered call option
III. It provides no risk of loss
IV. It holds high hopes of capital appreciationCorrect
Speculative derivatives are complex securities that investors purchase in hopes of capital appreciation but at great risk. Income-producing derivatives often take the form of selling covered call options, which provides no risk of loss and provides current income to the selling investor.
Incorrect
Speculative derivatives are complex securities that investors purchase in hopes of capital appreciation but at great risk. Income-producing derivatives often take the form of selling covered call options, which provides no risk of loss and provides current income to the selling investor.
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Question 10 of 10
10. Question
Which of the following is TRUE about Exchange-traded notes (ETNs)?
I. With ETNs, the repayment of principal at the maturity date is modified according to the day’s market index factor
II. They are based on the market index
III. They have periodic coupon payments
IV. The value of an ETN also depends on the creditworthiness of the debtor company, since ETNs are unsecured debt instruments.Correct
As their name implies, they are traded on an exchange, although they also have a maturity date like bonds. But with ETNs, the repayment of principal at the maturity date is modified according to the day’s market index factor. (Further, the repayment is reduced by investing fees.) The value of an ETN, however, is not simply based on the market index, but also depends on the creditworthiness of the debtor company, since ETNs are unsecured debt instruments.
Incorrect
As their name implies, they are traded on an exchange, although they also have a maturity date like bonds. But with ETNs, the repayment of principal at the maturity date is modified according to the day’s market index factor. (Further, the repayment is reduced by investing fees.) The value of an ETN, however, is not simply based on the market index, but also depends on the creditworthiness of the debtor company, since ETNs are unsecured debt instruments.