Regulations
Regulation T applies to these types of accounts
Cash and margin accounts for nonexempt securities
Dividends from REITS are taxed at
A client writes 1 Apr 30 call and buys 1 Apr 40 call. This is a
call credit spread
A 7% convertible debenture is selling at 101. It is convertible into the common stock of the same corporation at $25. The common stock is currently trading at $23. If the stock were trading at parity with the debenture, the price of the stock would be
$25.25
Given the NAV and asking price per share, which of the following could be open-end investment companies?
C) Nav: $19.00 Ask: $20
One of your clients frequently enters unsolicited orders to purchase penny stocks. How often does he get statements
Monthly
Capital gains on options is
short term
For a customer who has purchased stock and wants to write a call option, the option ticket would be marked (opening/closing, purchase/sale)
opening sale
Investor is in the 27% federal marginal income tax bracket invests in municipal general obligation public purpose bonds nominally yielding 4.5%, what is the tax-equivalent yield?
6.16%
Shortly after a market closing time order is entered, there is a Level 3 trading halt, what happens to the order?
The order is cancelled
Do we know the 3 levels of halts (767, 15 mins and rest of the day)
firms in their first year must submit advertisements to FINRA's Advertising Department how many business days prior to use.
10
investor buys a LEAPS contract on issuance and allows it to expire unexercised, what is the tax consequence
Long-term capital loss
A client thinks that a company's stock might be extremely volatile in the wake of upcoming earnings reports and new product reviews currently being mixed. The client does not own the stock but asks what might be a cost-efficient way to gain if that volatility occurs. You recommend
purchasing straddles
Which securities is typically sold with the legal opinion attached
Muni bonds
What does quote of "60 to 63, work out," mean
quote is approximate, or nominal
A corporate profit-sharing plan must be set up under
(a trust, a conservatorship, an administrator, a beneficial ownership)
trust
In educational IRA, excess distributions are taxed to
the beneficiary
A brokerage firm can pledge up to what percent of a customer's debit balance in a margin account as collateral
140%
Request to purchase document that needs the general partner's signature to approve a limited partner
Subscription agreement
According to technical analysis, when the market is consolidating, a chart showing the market trendline appears to be moving in what direction
sideways within a narrow range
(when market stays within a narrow price range so not moving up or down)
What does FINRA Rule 2210 deal with
communications with the public (retail, institutional, correspondence)
Which type of trust has a tax advantage
Irrevocable trust
A customer is long 100 XYZ currently trading at $40 per share. To generate income, the customer writes 2 XYZ Aug 40 calls at 4 for a maximum loss potential
that is unlimited
ABC Corporation has an outstanding 8% convertible bond that is callable at 102. Currently, the bond is trading at 101. The conversion price is $40, and the common stock is currently trading at $39.50. ABC announces a call at 102. To realize the greatest profit, a bondholder should
tender the bonds
If stock market indexes, such as the S&P 500 and the Dow Jones Industrial Average, are declining daily, and the number of declining stocks relative to advancing stocks is falling, a technical analyst will conclude that the market is
oversold
(The fact that fewer stocks are declining means the market may be running out of sellers)