1
On a long put, when the premium equals the intrinsic value, the put is ____
at parity
True or False:
Someone who purchases shares of a corporation's common stock has unlimited liability and voting rights.
False
A form of market manipulation that attempts to hold the price of the security down is called?
Capping
What is the spread on a stock quote?
The difference between the bid price and the ask price or offer
The maximum loss on a long put is
the premium
A broker-dealer would likely file a suspicious activity report (SAR) if the amount involved was____?
at least $5,000 in funds or other assets.
______is a form of market manipulation to keep the price of a security from falling
Supporting
Who is responsible for filing a U5 with the Central Registration Depository (CRD) following termination?
The member firm
An investor holds a November 35 call that was purchased on March 3. What is the last day to exercise the contract?
Third Friday of expiry month
The rules to prevent pay to play regarding contributions made to political parties, candidates, and elected officials by firms involved in the underwriting or sales of municipal securities are enforced by
Financial Industry Regulatory Authority (FINRA).
To ensure that the information obtained from each new customer is accurate, firms must furnish to each customer a copy of the account record within how many days of opening the account?
30 Days
A customer enters several orders in complex securities without concern on the returns or losses. Which stage of money laundering is this?
Layering
Your customer would like to invest in the stock of a Japanese manufacturer. The company's stock trades on the Tokyo stock exchange. Which of the following would be the best way to invest for this U.S.-based investor?
Purchase American depositary receipts for the company that trade in the U.S. markets
What are the three classifications of communication with the public?
Correspondence, Retail communications, Institutional communication
Firms must file a SAR within how many days of becoming aware of a suspicious transaction?
30 days, and they are prohibited from notifying the customer involved that a report has been filed
An investor sells short 1 MJS June 55 put at 2. The current market value of LMN is 56. The investor's maximum loss potential is
$5,300
An investor owning 500 shares of MES stock received notice that the stock had undergone a 2:1 forward split when the stock's market price was $10 per share. The investor now owns
1,000 shares worth $5 per share.
To open a new account that will have margin trading, which documents will be required?
hypothecation agreement, account agreement, credit agreement
When must a new options customer return a signed option account agreement form?
Within 15 calendar days of the account approval
An investor is short a January 30 call at 5. Maximum loss for the investor is
unlimited
A stock is about to undergo a corporate action in which the shares will be cancelled and the shares of a different company will be issued to shareholders. This action is most likely the result of a
merger or acquisition.
A customer of a securities firm has concluded that selling short would be an effective trading technique to reach his investment goals. Assuming the firm's principal agrees to permit the customer to effect short sales, what type of account would be most suitable for short selling?
Margin account
The TCPA only restricts solicitations that are delivered via
the telephone lines
An investor purchases 1 KLP October 95 put at 6.50. What is the investor's maximum potential gain with this position?
$8,850
What are examples of Cyclical industries
Steel, Auto, Heavy Equipment, Capital Goods