Money Monday
Another term for stocks and bonds
Equity and debt
A 6% corporate bond trading on a 7% basis is trading?
At a discount
A BB-rated 6% corporate callable bond that matures in 12 years that is trading at 100.25 is priced at?
A premium
A security that is a contractual obligation between two parties and whose value is based on the specifics of the contract in relation to a different security is?
A derivative
Your customer, Mr. Newsome, recently purchased one put contract on Napa Valley Spirits Inc, stock. The strike price is $50 and the premium was $4.50. He later executed the contract. How much did he pay for the contract?
$450
What is a derivative?
A contract that derives its value from an underlying asset
An investor might make money in a strong bull market by?
Buying equity index calls
If the owner of an option may only issue exercise instructions on the last day of trading, this is an example of?
A European-style option
The investment return of a variable annuity comes from?
The performance of the selected subaccounts within the separate account
The decision to annuitize a variable or fixed annuity may be reversed within how many days of election?
0 days
Class B mutual fund shares are also called?
Back-end load shares
Class A shares are best for investors with?
Larger investment amounts and long time frames
In order to clear up confusing language and highlight a funds features, a registered representative may?
Not change a prospectus in any way
D. Department of Education
How many primary offerings can a corporation issue?
Unlimited
What federal law regulates the initial sale of securities to the public?
The Securities Act of 1933
If a bond has a feature that allows the issuer to pay off bondholders prior to maturity, the bond has?
A call feature
An investor who is seeking income might choose a corporate bond because?
A corporate bond pays a steady income and are generally reliable
GV Entertainment Inc, issues a bond collateralized by a trust holding the company’s Vegas headquarters. This type of bond is called?
Mortgage bond
What does interest from a zero-coupon bond do?
Pays at maturity and is taxed annually
Your customer would like current monthly income from a very safe investment. Which would you recommend?
C. GNMA
What does AML stand for?
Anti-Money Laundering
When the interest rate paid on a debt security is less than the current inflation rate, the investor suffers from which of the following risks?
A. Liquidity risk
B. Call risk.
C. Purchasing power risk
D. Currency risk
C. Purchasing power risk
The possibility that an actual return on an investment will be lower than the expected return is?
Risk
What letter is a non-binding agreement between a purchaser of mutual funds and the fund underwriter that allows the investor up to 13 months to reach a specified dollar purchase?
Letter of Intent