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50 Cards in this Set

  • Front
  • Back

Your customer redeemed 200 of her 500 Kapco common shares without designated which shares were redeemed. Which of the following methods does the IRS use to determine which shares she redeems?


Which of the following is a tax-qualified retiremen plan for employees of nonprofit organizations?


A registed representative (RR) has a client who moved to another state. To continue doing business for the client, the RR should:

become registered in the state that the client has moved to

If an investor interested primarily in speculation does not expect the price of DWQ stock to change, he or she will

write an uncovered straddle

Which of the following has unlimited risk if it is the only position in an account?

short call

Which of the following investment vehicles has the highest credit risk?

Industrial revenue bonds

What does the Nasdaq Level 3 service do?

allows market makers to enter quotations into the system for a security in which they are registered

corporate bonds are considered safer than common stock issued by the same company because

bonds place the issuer under an obligation but stock does not

An investor purchases 5 Mt. Vernon Port Authority J & J bonds in a regular way transaction on Wednesday, October 18. How many days of accrued interest are added to the bond's price?


Listed stock options cease to traded on the:

third friday on the month of expiration

What types of securities issues must be registered with the SEC under the Securities Act of 1933

public DDPs

variable annuities

open-end funds

closed-end funds

A customer who has just started an IRA will be vested


What has a customer established who buys 5 XYZ Jan 40 calls at 6 and writes 10 XYZ Jan 50 calls at 1 when XYZ is trading at 43?

ratio spread

After receiving securities from another firm, a broker/dealer discovers that the securities recieved were not in good deliverable form. His recourse is to:

file a reclamation

A customer purchases ten 8% treasury notes at 101-16. What is the dollar amount of this purchase?


The interest that municipal securites pay is

federally tax exempt

A client with no ABC shares in his account wants to place an order to sell long 200 shares of ABC stock. Which of the following must a representative determine before placing the order?

Where the stock is currently held and whether it can be delivered in 3 business days

GC, inc. is proposing an additional public offering of common stock. It conducts a rights offering to its current shareholders at $55 per share, plus 5 rights. If the market price of GCI is $70 after the ex-rights date passes, what is the value of 1 right?


If an indenture has a closed-end provision, this means that

additional issues will have junior liens

The open-end investment company share price quoted in the newspaper is the:

bid price

If a customer closes his options position, he has

placed either a buy order or a sell order

to narrow the spread between the bid and the asked price of one of his stocks, a specialist enters a bid to buy for his own account, acting in this transaction as a:

dealer (or principal)

An investment adviser representative may describe dollar cost averaging to a customer as:

a funding technique that will cause the average cost per share to be less than the average price per share

The most current information on new releases of municipal bonds can be found in

"The Bond Buyer"

When does a customer have to receive the Options Disclosure Document?

before the first order

Your customer has eperienced $7,500 in capital losses this year. He has realized $2,000 in capital gains and has $65,000 adjusted gross income. How much of his loss will he be able to carry forward next year?


A 45 year old investor takes a lump sum distribution from a nonqualified variable annuity. How is the distribution taxed?

the growth portion is taxed as ordinary income and is subject to a 10% penalty

Whether funds should be allocated to support the debt service on a moral obligation bond in default is usually determined by the

state legislature

A customer may only use a mutual fund for margin purposes after it has been held in their account for:

30 days

Civil penalities under the Insider Trading and Securities Fraud Enforcement Act of 1988 may include:

the greater of $5 million, or 300% of the profits made or losses avoided

ABC is engaged in a stock rights offering with the help of Alpha Securities as managing underwriter. If Alpha Securities agrees to purchase the unused rights for any stock that ABC cannot sell to current stockholders, and use them to purchase stock for resale to the public, what type of underwriting arrangement is this?


On November 4, a customer writes an S&P 100 Jan 785 put at 6. the maximum potential gain on this position is:


A customer buys 1 XYZ Jan 65 put at 3.50 when XYZ is trading at 63.10. Just prior to expiration, with the option trading at 6.65 bid-6.70 asked, the customer closes his position with a market order. The gain is:


If a client bought 100 shares of GM at 88.50, and the same day he went long a put for 4.25 on GM due to expire within the month, what is the breakeven point?


If a customer has a margin account with a long position worth $20,000 and a debit balance of $8,000, what is the purchasing power of this customer's account?


A double-barreled bond would be defined as:

a bond that has its principal and interest baccked by revenues of a facility and the general taxing authority of a municipality

Every transaction made by a registered represetnative for a customer's account

must be reviewed by a principal of a FINRA member firm

For a new issue municipal syndicate account, settlement of the account must occur:

within 30 calander days after the issuer delivers the securities to the syndicate

A regulation A exemption covers a(n):

offering of $5 million or less in 12 months

In the underwriting of a municipal bond, which of the following is determined by the issuer rather than the underwriter?


For dividends to be taxed as qualified dividends, the dividend paying investment must be held for

more than 60 days

What is the size of one LEAPS contract?


In a variable life annuity with 10-year period certain, a contract holder receives:

a minimum 10 years of variable payments, followed by additional variable payments for life

An order memorandum or ticket must be completed:

prior to order execution

Which of the following is limited in the case of a limited tax municipal bond?

type of tax that can be used to service the debt

A client buys 100 shares of MCS at 20. If the stock rises to 30 and he wants to protect his gain, which of the following orders should be placed?

sell stop at 29

Your investor decides that he would like to open an options account. Which of the following is your responsibility as his registered representative?

Review with the client the risks involved when trading options and determine what types of options trading are appropriate for this client before the first options trade

A registered representative has reproduced a research report prepared by an independent reserach analyst on his broker/dealer's letterhead, with no mention of the party who prepared the report. If this literature is forwarded to a select group of clients only, the registered representative's action is:

not allowed

Selling mutual fund shares immediately below the dollar amount stated in the prospectus that would qualify an investor to recieve a reduced sales charge is called

a breakpoint sale

If a japanese exporter wants to hedge a recent sale of stereo equipment to a US buyer, and the exporter will be paid in US dollars upon delivery of the goods, the best hedge would be to

buy japanese yen calls