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75 Cards in this Set
- Front
- Back
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The ERW Corporation convertible bond has a conversion price of $50 per share. The conversion ratio is: |
c. 20.0 to 1
Par Value/conv px = Conv Px or #of shares Mkt px/shares = parity px of stk |
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Assuming investments of similar quality and coupons, which would be most appropriate for an investor who is anticipating a decline in interest rates over the next 15 years?
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Noncallable 15-year bonds and 30-year bond putable in 15 years.
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________have a LOW CORRELATION to other financial assets owned by investors because real investments react differently than stocks and bonds.
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REITS
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REITS must be registered with the ___________ if publicly sold.
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SEC
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DPS means?
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Dividend Per Share
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A PUT WRITER would be COVERED by:
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CASH equal to the STRIKE PRICE multiplied by 100 SHARES.
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A BASIS point on a BOND is EQUAL to 1/100th of a point or ____% if the $1,000 par value.
1. 1.0% 2. 10% 3. 0.01% 4. None of the above |
3. 0.01%
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DPS means?
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Dividend Per Share
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A PUT WRITER would be COVERED by:
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CASH equal to the STRIKE PRICE multiplied by 100 SHARES.
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A ______________ STRADDLE or COMBO is PROFITABLE if the market price moved:
1. LONG; Above UPSIDE Break-Even and Below DOWNSIDE Break-Even 2. SHORT; Above Break-Even and Above Down-Side. 3. Both 1 & 2 |
LONG; Above UPSIDE Break-Even and Below DOWNSIDE Break-Even
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Under a NET REVENUE PLEDGE, funds would be applied in the following SEQUENCE: (Memory Hook - O. B.s are D. R. S.
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O & M Funds
Bond Service Accounts for Principal/Interest Debt Service Reserve Fund/Sinking Fund Reserve Maint Fund/Renewal & Replacement (Depreciation) Fund Surplus Fund/General Fund of the Municipality |
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The GENERAL DIVIDEND payout for a PUBLIC UTILITIES company is:
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Greater than 75%
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A ________________ or COMBO is PROFITABLE if MARKET PRICE stay within BREAK-EVEN points.
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Short Straddle
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When an INVESTOR is SHORT both CALLS and PUTS, it is either a SHORT STRADDLE or SHORT COMBO, which represents a:
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NEUTRAL Market Strategy
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When INTEREST RATES decline, all bond prices __________, but the DISCOUNT BONDS (lowest PRICE) would appreciate more (and QUICKER) than bonds trading at a ______________.
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rise; PREMIUM
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A LONG-TERM option to BUY stock at a specified price from the issuing company is called a ___________.
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WARRANT
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What is the loan value of a 5 ABCMAY60CALL@6 in a MARGIN ACCOUNT?
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Zero
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LONG PUTS protect ____________ positions.
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LONG STOCK
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LONG CALLS protect _______________ positions.
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SHORT STOCK
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INVESTORS generally DO NOT SELL ______________ to HEDGE.
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OPTIONS
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LONG CALLS HEDGE ___________ positions.
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SHORT STOCK
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__________HEDGE Long Stock positions.
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LONG PUTS
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TOTAL RETURN is equal to:
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GROWTH + INCOME
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The MKT PX is FAIR and EQUITABLE when the P/E ratio is in the:
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TEENS (e.g. 17:1, 15:1)
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FULLY DILUTED EARNINGS PER SHARE is calculated assuming all potential dilutions occur from:
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Convertible Bonds, Stock Options, Preferred Stock and Warrants.
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EPS may be increased by:
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Tax loss carried forward, reduction of corporate income tax rates and retirement of outstanding bonds.
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CURRENT RATIO most accurately describes:
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LIQUIDITY; not PROFITABILITY, COVERAGE or DEBT
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TOTAL RETURN is equal to:
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GROWTH + INCOME
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The MKT PX is FAIR and EQUITABLE when the P/E ratio is in the:
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TEENS (e.g. 17:1, 15:1)
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FULLY DILUTED EARNINGS PER SHARE is calculated assuming all potential dilutions occur from:
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Convertible Bonds, Stock Options, Preferred Stock and Warrants.
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BROKER DEALERS who TRANFX funds, including WIRE FUND TRANFX of $3,000 or more:
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Must COLLECT, RETAIN, and RECORD certain information - NAME, ADDRESS, FIN INSTITUTION, ACCT # and AMT of TRANFX.
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MONEY LAUNDERING occurs in THREE STAGES:
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1. Placement Stage
2. Layering Stage 3. Integration Stage |
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If a MEMBER FIRM becomes AWARE of a SUSPICIOUS transaction, the FIRM must file a SUSPICIOUS ACTIVITY REPORT (SAR) within________ days.
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30
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COMMUNICATION with the public include:
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1. Advertising
2. Sales Literature 3. Correspondence |
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Advertising includes:
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1. Websites
2. Newspaper 3. Magazines 4. Radio, TV, Video, Telephone 5. Signs (BBs/motion pics) 6. Telephone directories |
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The FINRA MARKUP POLICY (also known as the 5% policy) applies to all:
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OTC principal and/or AGENCY trades--it would not apply to MUNI BONDS or SECURITIES listed on an EXCHANGE.
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The FINRA MARKUP POLICY is determined by:
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The CURR MKT VAL of a SECURITY; not the COST of the SECURITY.
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The MARKUP POLICY does not apply to:
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1. SECURITIES listed on a STK EXCHANGE
2. SECURITIES with a PROSPECTUS or CIRCULAR 3. GOV'T or MUNI Securities 4. Regulation "A" Offerings |
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The PRICE of the SECURITY for the last 12 months DOES NOT have to be DISCLOSED when:
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A RR is a making a WRITTEN RECOMMENDATION.
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SELF REGULATORY ORGs are:
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1. Supported by its own members
2. Sets RULES, REGs & PENALTIES 3. Allows it members to VOTE |
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SROs are not Gov't Agencies and:
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DO NOT set MIN COMMISSION RATES.
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All DISCIPLINARY ACTIONS taken by the SRO are subject to:
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SEC review.
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The VALUE of a COLLEGE SAVINGS PLAN is based on the:
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PERFORMANCE of the INVESTMENTS.
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Under a 529 PLAN, an account holder/owner can:
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CHANGE BENEFICIARIES at any time as long as the new beneficiary is a qualified member of the original beneficiary's family.
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Under a 529 PLAN, an account:
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Is NOT penalized in the case of a STUDENT's DEATH, DISABILITY, or RECEIPT OF A SCHOLARSHIP.
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PRE-PAID TUITION PLANS DO NOT have:
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INVESTMENT RISK
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PREPAID TUITION PLAN allows:
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Anyone to establish an account in the name of a student.
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COVERDELL - ESAs are most appropriate for;
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LOW to MIDDLE INCOME level contributors.
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For COLLEGE SAVINGS PLANS, the MAXIMUM CONTRIBUTION LIMIT can be set at more than:
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$200,000 depending on state regulations or guidelines.
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COLLEGE SAVINGS PLANS offer the POTENTIAL for HIGHER RETURNS than___________________.
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PRE-PAID TUITION PLANS (depending upon the performance of the securities in the portfolio).
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ERISA contains provisions to protect plans from ___________.
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FIDUCIARY MISMANAGEMENT and MISUSE.
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ERISA was enacted in 1974 to PROTECT the retirement assets of _______________.
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PRIVATE SECTOR EMPLOYEE BENEFIT PLANS.
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It is NOT a requirement that a FIDUCIARY:
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DIVERSIFY PLAN INVESTMENTS
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CONTRIBUTIONS made in CASH may be made:
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Up to APRIL 15th of the year FOLLOWING the year that the DEDUCTION was CLAIMED.
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IRA contributions MAY NOT be INVESTED in:
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1. Collectible Items - antiques, paintings, rugs, diamonds and stamps.
2. LIFE INSURANCE |
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A test used to determine if any ERISA investment is proper for any employee retirement plan is _____________________.
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"Amount of Risk" involved in the investment.
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A ___________ pay out method gives the investor the LARGEST payment of all methods. It pays the MOST, however when you die they keep the PRINCIPAL.
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LIFE ANNUITY
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In a SUBCHAPTER S CORP, ___________ are prohibited from being SHAREHOLDERS.
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NONRESIDENT ALIENS
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__________ and _________ are among the factors that should be evaluated in considering a REAL ESTATE partnership.
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MANAGEMENT EXPERTISE; ECONOMIC SOUNDNESS
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A DPP offered to the PUBLIC must be REGISTERED with:
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The SEC.
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The _____________ of a DPP is a MAJOR CONSIDERATION in establishing the SUITABILITY of a DPP.
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ECONOMIC VIABILITY
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A SIGNED APPLICATION to become a limited partner is called a:
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SUBSCRIPTION AGREEMENT
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A DPP SALE becomes FINAL when:
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The GENERAL PARTNER signs the AGREEMENT.
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WASH SALE RULE applies to securities sold a loss within:
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30 days before or after the sale purchases of "SUBSTANTIALLY IDENTICAL" securities; the loss is not allowed in the current year for FEDERAL INCOME TAX PURPOSES.
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_____________ and ___________ contribute to increasing INFLATIONARY PRESSURE.
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FULL EMPLOYMENT and HIGH CONSUMER SPENDING
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To END an INFLATIONARY PERIOD the FEDERAL RESERVE would:
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TIGHTEN the MONEY SUPPLY (sell GOV'T SECURITIES and RAISE the DISCOUNT RATE)
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A DECLINE in PRICES (with the EXCEPTION of UNION WAGES) and INTEREST RATES is called:
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A DEFLATIONARY PERIOD.
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DEFLATION negatively impact:
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OUTPUTS and EMPLOYMENT
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A STRONG DOLLAR causes:
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1. Less COMPETITIVE exports
2. More COMPETITIVE foreign imports |
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The IMF is funded by:
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INDUSTRIALIZED nations and its PURPOSE is to promote MONETARY and EXCHANGE stability and INTERNATIONAL TRADE.
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The WORLD BANK purpose is:
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to ASSIST DEVELOPING nations by providing them LOANS.
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BOND BUYERS should buy LONG TERM SECURITIES during:
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A NORMAL or POSITIVE YIELD CURVE.
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SHORT TERM MONEY MARKET INVESTMENTS are the SAFEST during:
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a NEG or INVERTED YIELD CURVE.
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BOND BUYERS should consider SHORT or INTERMEDIATE BOND MATURITIES during:
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Periods of ECONOMIC UNCERTAINTY (or FLAT YIELD CURVE)
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If the FED RES is PURCHASING GOV'T SECURITIES it causes:
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1. Bank DEPOSITS to INCREASE.
2. Bank RESERVES to INCREASE. |
