Unit 2
A number of authorized shares is distributed to shareholders as part of a corporations capital formation. What are these shares called?
What is issued shares?
An investor pays 102 ($1020) for a $1000 par value bond. At maturity,
What is the premium paid decreases the return.
BOB Income Fund has net assets of $120 million and $5 million in liabilities. If the fund has 5 million outstanding shares what is the NAV?
What is $24
An accredited investor is one who meets which of the following criteria
What is income, net worth, or professional designation
A fee-based account charges
what is a set amount monthly or quarterly for all trading activity
A non-affiliated person owns 3% of an issuer's common stock. This person will be considered a control person if a spouse owns
What is 8% of the issuer's common stock
The city of Philadelphia issued $100 million in GO debt three years ago. The bonds were issued with a 20yr maturity and carry a 5% coupon. Your client, who purchased one of these bonds on the initial offering, calls you to get a coupon quote. You respond that the bonds are selling at a slight premium. This means that
What is the nominal yield is higher than the yield to maturity.
PQR treasury bond fund has a public offering price (POP) of $50 per share and a net asset value (NAV) of $47.50. What is the fund's sales charge (SC)?
MNO stock CMV is $75 a share. An MNO Nov 80 put is trading at $7. Which is true?
I: the TV is $2
II: the IV is $5
III: the TV is $5
IV: the IV is $2
What is I and II
Which of the following cannot be purchased on margin
what is call and put contracts
A customer owns cumulative preferred stock (par value $100) that pays an 8% dividend. The dividend has not been paid this year and was missed in the two previous years. If the company wants to pay a dividend to its common shareholders, how much must the company first pay to this customer?
What is $24?
An investor holding a corporate issued mortgage bond is holding a debt security that is
What is backed by real estate and therefore considered secured
Which of the following investment companies typically have a fixed portfolio
What is a UIT
An investor believes the price of an exchange-listed stock will likely fall in the near term. Which of the following option strategies would best support this belief
What is Buying puts
Minimum maintenance requirements in a long margin account is
what is 25%
A customer receives a voting proxy from a broker-dealer for shares owned by the customer and held in street name. The customer returns the proxy but later decides to attend and vote at the shareholder meeting in person. The voting proxy...
What is the proxy would be revoked, only the one in the meeting would count.
Municipal revenue bonds
I: do not require voter approval
II: generally have a higher rating than GO bonds from the same issuer
III: are not subject to statutory debt limits
IV: are backed and supported by ad valorem (property) taxes
What is I and III
The violation of selling mutual fund shares just below the point where the customer would qualify for lower sales charges and not informing the customer that they may qualify for lower sales charge is
What is a break point sale
If the options agreement is not returned signed within 15 days of account approval, which of the following transactions could a customer perform if the initial transaction was buy calls to open
What is sell calls to close?
A customer receives a Regulation T margin call for $3200. To meet the deposit requirement, which can be deposited
What is fully paid for marginable securities totaling $6400 in market value
All of the following are advantages of using American Depository Receipts (ADR) when investing in the stock of a foreign corporation EXCEPT
Regarding CDs and negotiable CDs issued by banks,
What is only negotiable CDs are considered money market instruments
Which of the following investment companies do not redeem their shares?
What is closed end funds
DAILY DOUBLE: Complete the diagram.
see diagram
a RR is appointed the fiduciary for a trust account. which of the following is true?
what is the investment decisions must be made in accordance with the prudent investor rule