Bag 1
A firm quote means:
What is the price is guaranteed for a specified amount?
“Long 2 XYZ Oct 50 Calls” means the investor:
What is Has the right to buy 200 shares at $50
This IRA type allows anyone with earned income to contribute.
What is a traditional IRA?
Free-riding occurs when a customer
What is Buys and sells without paying?
Which bond yield is always the lowest on a premium bond?
A. Nominal
B. Current
C. Yield to maturity
D. Yield to call
What is Yield to call?
Money market securities have this type of maturity.
What is a Short-term?
A stock trades at $30 and pays a quarterly dividend of $0.20. What is its current yield?
2.6%
Which securities are exempt from the Securities Act of 1933?
A. Corporate bonds
B. Municipal bonds
C. Preferred stock
D. Closed-end funds
What is Municipal bonds
This regulation prohibits manipulation during underwriting.
What is Regulation M-Market Manipulation?
This rule restricts selling just below a breakpoint to earn more commission.
What is a breakpoint sale violation?
To be a covered call, the seller must:
What is own the underlying shares?
The Bank Secrecy Act focuses mainly on:
What is AML compliance
These required distributions begin at age 73 for traditional IRAs.
What are RMDs (Required Minimum Distributions)?
A discretionary order allows the RR to choose:
What is Action, asset, or amount?
Which product has prepayment risk?
A. Money-market fund
B. Treasury note
C. GNMA pass-through
D. Preferred stock
What is GNMA pass-through?
This underwriter commitment requires buying all unsold shares.
What is a Firm Commitment?
This trust terminates when the grantor dies.
What is a revocable trust?
An underwriter places bids below the market to prevent a stock’s price from rising above the offering price. The act is:
What is Capping?
A broker places trades ahead of a large customer order to profit from the movement caused by the client’s trade. What is this?
What is Front-Running?
This rule limits how much a mutual fund may charge in distribution (12b-1) fees.
What is the FINRA 12b-1 fee limit?
Excessive trading done to earn commissions, not to help the client, is called?
What is Churning?
Regulation SP (Gramm-Leach-Bliley Act (GLBA)) requires firms to:
Protect customer privacy
Withdrawing retirement funds early usually results in this penalty.
What is a 10% early withdrawal penalty?
The three types of Investment Companies are?
What is Face Certificate, Management Companies (Open Ended/Mutual Fund & Close-End), and Unit Investment Trusts?
This disclosure tells customers that margin accounts involve risk and may lose more than invested.
What is the margin risk disclosure statement?
A closed-end fund trades:
What is below or above NAV?
A registered rep enters orders they never intend to execute, only to move the market price. What violation is this?
What is Spoofing?
ETFs trade:
What is throughout the day on exchanges>
A municipal general obligation bond is backed by:
What is The issuer’s taxing authority?
A callable bond is MOST likely to be called when:
What Interest rates fall?
The length of time a shelf registration is valid.
What is 3 years?
Front-running is prohibited because it involves:
What is Trading ahead of customer orders?
A municipal revenue bond is backed by:
What is User fees
This type of order is placed entirely by the customer without firm input.
What is an unsolicited order?
This rule allows the sale of restricted stock under specific holding-period and volume limits.
What is SEC Rule 144?
The maximum civil penalty for insider trading.
What is three times the profit gained or loss avoided?
This account type is inappropriate for selling uncovered call options.
What is a fiduciary account?
This rollover must be completed within 60 days or it becomes taxable.
What is an indirect rollover?
A municipal bond paying tax-free interest is MOST suitable for
What is A retiree in a high tax bracket?
An investor engages in selling inflated shares to customers while secretly having prearranged buybacks to keep the price high. This is:
What is Pump-and-dump?
This type of joint account avoids probate:
What is Joint tenants with right of survivorship?
These three elements—action, asset, and amount—must be determined by the client.
What are the three elements required to avoid discretion?
A trust indenture:
What is
a formal legal contract between the bond issuer (the company borrowing money), the bondholders (the investors lending the money), where the issue contracts a trustee to watch over the bond and make sure the company does what it promised (pay interest on time, keep collateral in good condition, etc)
This agreement allows a broker to lend a customer’s securities for short sales.
What is the loan consent agreement?
A fund with a deferred sales charge is known as:
A. Class A
B. Class B
C. Class C
D. Class
What is Class B?
What is a Direct Participation Program?
What is an investor buying ownership into an issuer and sharing in profits & losses?
This trust is created after a person’s death and holds assets for distribution.
What is a testamentary trust?
This retirement plan combines employer and employee contributions, often for small businesses.
What is a SIMPLE IRA?
Hypothecation refers to?
What is a customer pledging securities as loan collateral?
A suitability determination must be made when
What is Opening an customers account?