Economics
What is a coincident economic indicator that moves at the same time as the economy?
What is Gross Domestic Product (GDP)?
What is the market where securities are sold for the first time?
What is the primary market?
What document outlines a customer’s objectives, risk tolerance, and financial situation?
What is the customer investment profile?
What yield is calculated by dividing annual income by market price?
What is current yield?
What organization regulates broker-dealers and registered representatives?
What is FINRA?
What is the phase of the business cycle when interest rates are typically at their lowest?
What is the trough?
What underwriting arrangement places the risk of unsold securities on the underwriter?
What is a firm commitment?
What type of account allows borrowing from the broker-dealer?
What is a margin account?
What yield assumes a bond is held until maturity?
What is yield to maturity?
What organization writes rules for municipal securities?
What is the MSRB?
What is the Federal Reserve action most often used to combat rising inflation?
What is raising interest rates (tight monetary policy)?
What document must be delivered to investors no later than settlement?
What is the final prospectus?
What term describes a customer’s emotional ability to handle losses?
What is risk tolerance?
What type of gain is taxed only when a security is sold?
What is a capital gain?
What entities enforce MSRB rules?
What are FINRA and the SEC?
What is the most common interpretation of an inverted yield curve?
A. Expansion
B. Inflation
C. Recession
D. Recovery
What is
C. Recession?
What underwriting method means the underwriter acts only as an agent?
A. Best efforts
B. Firm commitment
C. All-or-none
D. Standby
What is
A. Best efforts?
What type of account cannot be discretionary?
A. Margin
B. Options
C. Custodial
D. Cash
What is
C. Custodial account?
What tax rate applies to short-term capital gains?
A. Preferential
B. Ordinary income
C. Zero
D. Corporate
What is ordinary income tax rates?
What body regulates trading activity on its own exchange?
A. SEC
B. FINRA
C. SIPC
D. Securities exchanges
What are securities exchanges?
What is the economic theory that supports increased government spending during recessions?
What is Keynesian theory?
What type of offering is most likely exempt from registration under the Securities Act of 1933?
What is a private placement?
What regulation requires broker-dealers to act in the retail customer’s best interest?
What is Regulation Best Interest (Reg BI)?
What tax is municipal bond interest generally exempt from?
What is federal income tax?
What is the primary purpose of record retention requirements?
What is regulatory oversight and investor protection?
What is considered a lagging economic indicator?
A. Housing starts
B. Corporate profits
C. Stock prices
D. Consumer confidence
What are
B. Corporate profits?
What participant helps stabilize pricing during a new issue?
A. Issuer
B. Transfer agent
C. Registrar
D. Underwriting syndicate
What is
D. Underwriting syndicate?
What factor most directly affects a customer’s time horizon?
A. Net worth
B. Age
C. Tax bracket
D. Liquidity
What is
B. Age?
What creates taxable income for zero-coupon bonds?
A. Imputed interest
B. Capital appreciation
C. Dividends
D. Coupon payments
What is
A. Imputed (phantom) interest?
What is the minimum retention period for customer account records?
A. 2 years
B. 3 years
C. 6 years
D. 10 years
What is 6 years?
What is the typical effect of rising interest rates on bond prices?
What is bond prices fall?
What preliminary prospectus contains a red disclaimer stating the issue is not yet approved?
What is a red herring?
What authority allows a representative to decide timing and price but not objectives?
What is discretionary authority?
What holding period qualifies for long-term capital gains treatment?
What is more than one year?
What is the required retention period for advertising records?
What is 3 years?
What factor most directly influences long-term interest rates?
What is inflation expectations?
What term refers to the raising of funds through issuing new securities?
A. Secondary trading
B. Capital formation
C. Market making
D. Liquidity
What is
B. Capital formation?
What type of recommendation would most likely violate Reg BI?
What is recommending a higher-commission product without justification?
What is the maximum amount of capital losses that may offset ordinary income annually?
What is $3,000?
What organization protects customers if a broker-dealer fails financially?
What is SIPC?
What entity controls fiscal policy in the United States?
What is Congress (and the President)?
What Act governs disclosure requirements for new securities offerings?
What is the Securities Act of 1933?
What risk cannot be eliminated through diversification?
What is systematic risk?
What portion of investment return is not taxed until sale?
What is price appreciation?
What federal regulator oversees broker-dealers?
What is the SEC?
What economic environment is generally most favorable for equities?
What is stable growth with low interest rates?
What underwriting arrangement presents the greatest risk to the underwriter?
What is a firm commitment?
What does financial capacity measure that risk tolerance does not?
What is the ability to absorb financial loss?
What investor benefits most from tax-exempt income?
What is an investor in a high tax bracket?
What authority oversees all SROs?
What is the SEC?