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NEW QUESTION # 187
Which of the following is not found in the final prospectus?
- A. a statement that the SEC neither approves nor disapproves of the issue
- B. a statement as to possible stabilization by the manager
- C. the public offering price
- D. a copy of the underwriting agreement
Answer: D
Explanation:
a copy of the underwriting agreement. The underwriting agreement is "not" in the final prospectus. This is a contract between the issuer and the underwriting syndicate.
NEW QUESTION # 188
The net investment income of an open-end investment company represents:
- A. net income from dividends and interest paid on securities in the fund's portfolio
- B. dividends, interest, and net gains on sales of securities
- C. net gains on sales of portfolio securities
- D. net profits from the investment company operation
Answer: A
Explanation:
net income from dividends and interest paid on securities in the fund's portfolio. Net investment income is dividends and interest but not capital gains.
NEW QUESTION # 189
Which of the following persons would consider annual reports of a corporation as the most important factor in making investment decisions?
- A. a follower of the Dow theory
- B. a technical analyst
- C. a fundamental analyst
- D. a chartist
Answer: C
Explanation:
Explanation/Reference:
Explanation: a fundamental analyst. These analysts are guided by computations about a company's performance using data in annual reports.
NEW QUESTION # 190
In which of the following situations may exemption from compliance with Regulation T be granted?
- A. a broker/dealer conducts business only in registered securities
- B. a broker/dealer transacting less than 10% of its business through a member of a securities exchange
- C. none of the above
- D. a broker/dealer who does not offer margin accounts
Answer: C
Explanation:
Explanation/Reference:
Explanation: none of the above. No broker/dealer is exempt. Reg T covers cash accounts as well as margin accounts.
NEW QUESTION # 191
Which of the following sets of prices is that of a closed-end investment company?
- A. $10.10 $11.00
- B. $7.50 $8.10
- C. $28.14 $27.75
- D. $20.15 $21.85
Answer: C
Explanation:
NAV=$28.14 and Asked Price=$27.75. In this case the ask price is less than NAV, which is never true of an open-end investment company.
NEW QUESTION # 192
Which of the following may occasionally be purchased at a discount from net assets value?
- A. open-end funds
- B. no-load funds
- C. closed-end funds
- D. contractual plans
Answer: C
Explanation:
Explanation/Reference:
Explanation: closed-end funds. Mutual funds are purchased at NAV (when no-load) or NAV plus a sales charge. The pricing of closed-end funds is determined by market activity and has no direct link to NAV.
NEW QUESTION # 193
Which of the following is not good delivery on a sale of 470 shares?
- A. 4 100-share certificates and one 70-share certificate
- B. 8 50-share certificates, one 40-share certificate, and one 30-share certificate
- C. 47 10-share certificates
- D. 2 100-share certificates and 3 90-share certificates
Answer: D
Explanation:
Explanation/Reference:
Explanation: 2 100-share certificates and 3 90-share certificates. Three 90-share certificates are not good delivery because they cannot be combined into 100-share amounts.
NEW QUESTION # 194
Which of the following does not describe an underwriting procedure?
- A. standby
- B. all or none
- C. fill or kill
- D. best efforts
Answer: C
Explanation:
fill or kill. Fill or kill is an order qualifier. It requests immediate execution of the whole order or immediate cancellation. A best efforts underwriting, frequently linked to all or none, is usually seen on small new issues. A standby underwriting is utilized to guarantee the success of a rights offering.
NEW QUESTION # 195
The FINRA markup policy applies to:
- A. principal transactions in municipal bonds
- B. mutual fund sales
- C. new issues of corporate securities
- D. agency sales OTC
Answer: D
Explanation:
Explanation/Reference:
Explanation: agency sales OTC. Markup policy applies to basically all securities other than government and municipal offerings expect where the security is offered under a current prospectus. Choices C and D are offered under a prospectus. Choice B involves municipal securities. Therefore, choice A is the only correct answer.
NEW QUESTION # 196
All sales literature and advertising relating to investment company shares prepared by members of FINRA must be filed for review with which of the following?
- A. Anti-Trust Division of the Justice Department
- B. Federal Reserve Board
- C. FINRA
- D. SEC
Answer: C
Explanation:
FINRA. Sales literature regarding investment company shares must be filed with FINRA within three days after the first use.
NEW QUESTION # 197
Which of the following is not an attribute of US treasury bills?
- A. always sells at a discount to face value
- B. interest is exempt from federal income taxes
- C. an unusually high degree of liquidity
- D. is most often issued with three-month, six-month, and one-year maturities
Answer: B
Explanation:
interest is exempt from federal income taxes. This is the choice that is "not" an attribute of treasuries. All of the other choices are attributes of US treasury bills, which are subject to federal income taxes.
NEW QUESTION # 198
Bubba buys a 5% bond that matures in 15 years with a 5.10 basis. How much did he pay for the bond?
- A. 100.00
- B. 98.96
- C. 105.10
- D. 5.00
Answer: B
Explanation:
Explanation/Reference:
Explanation: 98.96. A calculator is not required for this. Even Bubba knows the bond is obviously trading at a slight discount by yielding 5.10% instead of the coupon rate of 5%. If the yield was the same as the coupon rate, the price is 100.00.
NEW QUESTION # 199
Which of the following have a stated interest rate on the face of the certificates?
- A. treasury bills
- B. treasury bonds
- C. treasury notes
- D. both B and C
Answer: D
Explanation:
both B and C. Treasury notes and treasury bonds have stated interest rates. Treasury bills are always sold at a discount to the face amount payable at maturity.
NEW QUESTION # 200
Which of the following is considered an intangible asset?
- A. furniture
- B. accounts receivable
- C. trademarks
- D. marketable securities
Answer: C
Explanation:
trademarks. Intangible assets are those whose true value cannot be determined, but there is some supposed market value.
NEW QUESTION # 201
Bubba is a registered representative who wishes to buy shares of a new issue his firm is distributing. Under FINRA Conduct Rules, Bubba may:
- A. do so if he has a history of buying hot issues
- B. do so if his allotment is insubstantial and not disproportionate to public orders
- C. not do so for his own account, buy may purchase shares for his sister's account
- D. not do so under any circumstance
Answer: D
Explanation:
not do so under any circumstance. New issues may not be distributed to Bubba or members of his immediate family.
NEW QUESTION # 202
A company earns $6 per share and pays out 20% in common stock dividends.
What does the stock yield if it sells at $30 per share?
- A. 10%
- B. 6%
- C. 4%
- D. 2.5%
Answer: C
Explanation:
Explanation/Reference:
Explanation: 4%. The dividend is $1.20 per share ($6 x 20%). Divide this by the stock price to obtain the yield.
NEW QUESTION # 203
A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of common stock. If it already has six million shares outstanding at the time of the offering.
What subscription ratio is the corporation establishing for each new share?
- A. 6 million rights per share
- B. 10 rights per share
- C. 10 million rights per share
- D. 6 rights per share
Answer: D
Explanation:
6 rights per share. Each share receives a right and there are six million shares receiving rights to one million new shares. So six rights are required for one share.
NEW QUESTION # 204
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