Hilare
A relatively widespread between the bid and ask of a municipal security indicates
A. Low volatility
B. Strong market interest
C. Limited liquidity
D. A highly liquid market
C. Limited liquidity
Interest from bonds issued to support which of the following projects is most likely to be excluded from the AMT calculation?
A. Schools
B. Sports stadiums
C. A new private hospital radiology unit
D. Expansions to a manufacturing plant
A. Schools
The number of times a private activity bond may be refunded is:
A. One
B. None
C. Three
D. Unlimited
D. Unlimited
A municipal advisor has a fiduciary responsibility while advising on a negotiated new issue to
A. the book running senior manager.
B. the issuer.
C. the SEC.
D. the purchasers of the security.
B. the issuer.
The underwriters of a new municipal issue are responsible for which of the following?
A. Submission of the registration statement and official statement to the SEC
B. Submission of an official statement to the MSRB's EMMA system
C. Hiring the bond counsel that is responsible for compiling the official statement and submitting it to the MSRB
D. Filing the final version of the official statement with the SEC
B. Submission of an official statement to the MSRB's EMMA system
All of the following securities are triple tax free EXCEPT:
A. Bonds issued by the U.S. Virgin Islands
B. Bonds issued by the Commonwealth of Puerto Rico
C. Government National Mortgage Association Bonds
D. A New York state bond purchased by a New York City resident
C. Government National Mortgage Association Bonds
Which of the following would be found in the Notice of Sale?
A. The name of the managing underwriter
B. The bond rating
C. The coupon rates
D. The maturity schedule
D. The maturity schedule
The rate that discounts all future cash payments so that the sum of their present values equals the bond proceeds is the:
A. Accretion rate
B. Amortization Rate
C. Rate of return
D. True interest cost
D. True interest cost
The responsibility for final settlement of the syndicate account for a new issue of municipal securities belongs to the
A. Bond counsel
B. Municipal advisor
C. Syndicate manager
D. Trustee
C. Syndicate manager
A retail order period is best defined as:
A. an order period during which orders that meet the issuers designated eligibility criteria for retail orders and for which the customer is already conditionally committed will be given priority.
B. the period of time that retail brokers can exclusively solicit and confirm orders from individuals.
C. an order period that excludes flippers and dealer trading desks.
D. an order period during which only small orders will be given priority.
A. an order period during which orders that meet the issuers designated eligibility criteria for retail orders and for which the customer is already conditionally committed will be given priority.
Which of the following is true about the selling group?
A. They receive the greatest compensation in the syndicate.
B. The compensation they receive is known as the total takedown.
C. They act as agents on the deal.
D. They have liability for unsold securities.
C. They act as agents on the deal.
In addition to state and local governments, parties that must provide continuing disclosure to EMMA are
A. Bond Counsel
B. Syndicate managers
C. Obligated persons
D. Financial consultants
C. Obligated persons
All of the following choices are types of advance refunding, EXCEPT:
A. Full cash or gross refunding
B. Convertible refunding
C. Net cash refunding
D. Crossover refunding
B. Convertible refunding
An investor purchases a 10-year municipal bond in the secondary market for 105. If the bond is held to maturity, the investor's tax consequence is
A. A capital gain of $100
B. No gain or loss
C. A capital loss of $100
D. A deductible investment loss of $100
B. No gain or loss
All of the following statements regarding EMMA are true EXCEPT
A. It includes official statements and mandated continuing disclosure updates
B. It is available to industry persons but not the investing public
C. It includes real time trade prices for nearly every municipal security
D. It is the MSRB's official repository for disclosure information on outstanding municipal issues
B. It is available to industry persons but not the investing public
A bank that wishes to take advantage of the ability to deduct carrying costs for qualified municipal issues must insure that
A. The issuer is located within the same city
B. The issuer issues no more than $10 million of tax-exempt bonds in a calendar year
C. The bank has invested in no more than two such issues during its fiscal year
D. The issue is for a private purpose
B. The issuer issues no more than $10 million of tax-exempt bonds in a calendar year
Which of the following is NOT true relating to qualified private activity bonds?
A. 100% of the bond proceeds must be used for a qualified purpose
B. The issue must fall with the state's volume limit
C. The issue is subject to public approval
D. There is a limit to the amount of bond proceeds that can be used to finance issuance costs
A. 100% of the bond proceeds must be used for a qualified purpose
The continuing disclosure obligations are required to be filed:
A. With the MSRB
B. With either the MSRB or the SEC
C. With the SEC
D. With both the MSRB and the SEC
A. With the MSRB
In a competitive offering the role of a municipal adviser generally includes assistance with all of the following EXCEPT
A. Preparing the notice of sale
B. Computing True Interest Cost
C. Obtaining CUSIP numbers
D. Establishing the retail order period
D. Establishing the retail order period
A group net order is defined as
A. an order from a group of long term investors willing buy at the offered side.
B. an order at net offering price that requires immediate confirmation.
C. an order from a selling group member for all the bonds in a given maturity.
D. an order at the net offering price that benefits all syndicate members according to their percentage participation in the account.
D. an order at the net offering price that benefits all syndicate members according to their percentage participation in the account.
Timely confirmation of allocations is important to a successful underwriting because
A. delays expose participants to potential increased credit risk.
B. delays expose participants to potential increased trading risk.
C. delays expose participants to potential increased funding risk.
D. delays expose participants to potential increased interest rate risk.
D. delays expose participants to potential increased interest rate risk.
All of the following statements apply to Alternative Minimum Taxes and municipal bonds (AMT) EXCEPT:
A. Bond confirmations will identify if AMT applies to the issue
B. The AMT must be calculated separately and compared to the normal tax calculation
C. The tax that must be paid is the lower of the AMT or normal income tax calculation
D. Interest from private activity bonds must be included in the calculation
C. The tax that must be paid is the lower of the AMT or normal income tax calculation
Rules and terms concerning the bidding procedure of a new municipal bond coming out on a competitive basis would be found in the:
A. Official Notice of Sale
B. Preliminary Prospectus
C. Official Statement
D. Agreement Among Underwriters.
A. Official Notice of Sale
A municipal bond that was issued at par is purchased at $900 with 20 years to maturity. It is sold 5 years later at $980. Assume accretion of $25 based on the straight line method. This transaction would result in
A. Ordinary income only
B. No gain or loss
C. A capital gain and ordinary income
D. A capital gain only
C. A capital gain and ordinary income
Which of the following statements is true regarding a conduit issuers reimbursement for issuing costs?
A. A maximum of 5% of bond proceeds may be used to reimburse a conduit issuer for issuing costs
B. Bond proceeds cannot be used for reimbursement of issuing costs
C. A maximum of 2% of bond proceeds may be used to reimburse a conduit issuer for issuing costs
D. There is no specified limit on the maximum amount of bond proceeds that may be used to reimburse an issuer, although a "reasonable" test must be applied
C. A maximum of 2% of bond proceeds may be used to reimburse a conduit issuer for issuing costs