Which of the following best describes phantom income?
Bubba Corporation has 3,500,000 shares of common stock outstanding and its trading volume in the few weeks has been as follows:
Week 1 - 43,000
Week 2 - 30,900
Week 3 - 37,500
Week 4 - 42,600
Week 5 - 33,000 (the most recent week)
If an affiliated person wanted to liquidate some of his holding of 100,000 shares pursuant to SEC Rule 144, how many shares could he sell?
Commercial paper is typically issued with a maturity date not exceeding:
Which of the following registered investment companies normally sells with an appropriate commission added to the contract price?
Under an initial federal requirement of 70% equity, Bubba purchases 100 shares of XYZ at $40 per share and wishes to satisfy the margin call by delivering another listed security into his account.
He may do so by depositing stocks with a market value of:
Under Rule 415 a corporation may file a single registration statement with the SEC covering its anticipated financing need for the next:
The accounting statement that represents a company’s financial position on a particular date is the:
Which of the following persons would consider annual reports of a corporation as the most important factor in making investment decisions?
Bubba sells short 100 XYZ at $60 and makes the required Regulation T deposit of 50%. XYZ then rises I price to $65.
At this point what is the credit balance?
Bubba buys $100,000 of US Treasury 10½ s of 31 on margin. If the current market price is 92.16, what is Bubba’s minimum deposit requirement?
What is the loan value on a call option held in a customer’s margin account?
Which of the following municipal securities carries the full faith and credit of the US government for payment of interest and principal if the issuer’s funds are insufficient?
Which of the following does not issue debt securities that trade in the open market?
A company may pay a declared dividend in which of the following ways:
What is represented by the net investment income of an open-end investment company?
Bubba Brokerage Corporation announces through its wire system that it has a large block of stock for sale. Customers purchasing the stock will not pay a commission. The block is crossed on the NYSE floor and is printed on the NYSE tape. This is called a:
An “accumulation unit” of a variable annuity is used to determine which of the following?
Provisions of SEC Rule 145 normally apply to an exchange of one security for another as a result of:
Which of the following is not in the subscription agreement for a limited partnership offering?
Which of the following situations is possible for a writer of a covered call option?
In stabilizing a new issue, the manager may make a “syndicate penalty bid”. This means that:
What is the maximum amount of gift to customers or other individuals related to the securities business that a registered representative is permitted to give?
How many days after the settlement date must a broker/dealer “buy in” a customer who has failed to deliver securities?
Bubba has a short margin account with equity of $15,000 and a credit balance of $28,000.
What is th e current NYSE minimum equity maintenance requirement on Bubba’s account?
When a corporation issues a nonconvertible debenture, what is the effect upon its net worth?
The Bubba Insurance Company is not incorporated. It consists of Bubba and his two brothers as general partners, who maintain an active securities account in the name of the company. If one of the partners should suddenly die, what course of actions should be undertaken by the registered representative at the brokerage?
Which of the following is not an attribute of US treasury bills?
Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500.
What is the NYSE minimum equity maintenance for this account?
Which of the following pairs of terms are synonyms in connection with most mutual funds?
A syndicate manager has just been informed that its bid has been accepted and all syndicate members are duly notified. Public information on the award will be most quickly available from:
If federal excise taxes were increased by the government, what would the typical investor do about his securities portfolio?
The definition of debentures is:
The preferred stock of Greatest Technology Corporation has a $100 par and is convertible into four shares of common stock. The preferred is trading at 104.50. The preferred is callable at 101. If the common stock price is presently 27.89, which of the following actions would be a successful arbitrage:
The principal underwriter of an open-end investment company is frequently called:
Who is responsible for verifying that limited partners meet net worth and income requirements?
Common stocks for which of the following industries are most likely to decline in value when interest rates rise?
A four-letter symbol assigned to an issue is characteristic of an equity security that is:
Bubba want to buy a CMO. In general, how often should he expect to receive interest payments?
Bubba and his wife, Bubbette, maintain a joint account with a brokerage firm as “joint tenants in common”. Bubbette calls a registered representative at the brokerage and places an order to sell 100 shares of XYZ, which is long in the account.
Which of the following statements is correct about this order?
A market-maker has purchased a particular stock over a period of time for prices as high as $9 per share and as low as $3 per share. The average cost is approximately $6 per share. The current NASDAQ quote for the stock is 5 to 5.25. According to the FINRA Conduct Rules, the dealer’s offering price to the public should be based upon:
Which of the following may occasionally be purchased at a discount from net assets value?
Customers who engage in increased activity of wiring money from their account could indicate which of the following activities?
Partnership democracy is:
In comparing the premium cost of a LEAPS option with a premium of a traditional option on the same security and same strike price, which of the following is generally true?
Which of the following does not appear in a municipal syndicate letter to underwriters?
Under which of the following conditions are homeowners most likely to refinance existing mortgages?
Which of the following is true about a customer with a frozen account?
The maximum contribution an employer may make to a SEP-IRA is:
Regulation T is set at 50%. Bubba’s account contains long positions in the following securities with the prices listed:
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
What is the buying power in Bubba’s account?
In regard to discretionary accounts, which of the following statements is correct?
Bubba buys a bond issued at par with a 5% coupon that is convertible into common stock at $40. The bond increases in value by 20 points.
What is the conversion parity of the stock?
When a member firm buys or sells securities directly as principal with a public customer, it is acting as:
Most publicly owned securities are:
In considering the fairness of a firm’s markup, the FINRA considers:
Which of the following are considered to be discretionary orders under the FINRA Rules of Fair Practice?
A public offering by an investment banker in which any securities not sold are returned to the issuer is known as:
The agreement between the members of a syndicate and the manager is known as the:
Which securities do not receive dividends?
A new stock offering by Bubba Corporation provides details that state between 1,000,000 and 1,500,000 shares will be sold depending upon market conditions. This offering is a:
What is the term applied to a classification of CMO securities having a stated maturity, average life, and estimated yield?
Smart Company, Inc., has cash it intends to use in six months for purchase of equipment. The most prudent investment during the six-month period is:
A group net order is one that benefits municipal syndicate members:
Which of the following is true about option prices?
Bubba holds 200 shares of common stock in a utility company and receives rights to subscribe to an additional 100 shares at $20. The utility company is raising $40 million of new capital.
How many shares of common stock for the utility company were outstanding prior to the rights offering?
Which of the following stock exchanges is not registered with the SEC?
Which of the following best describes depreciation?
Municipal bond brokers generally conduct the following:
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?
Which of the following will not result in termination of a limited partnership?
When an index option is exercised, settlement is made by:
The net investment income of an open-end investment company represents:
In order to determine the amount of estate tax due, if any, the assets of a decedent’s estate are valued as of the date of death. A second evaluation is then made:
In terms of depletion, percentage depletion is better than cost depletion because it:
Which of the following municipal bonds may be grouped under the classification of “revenue bonds”?
Which of the following is not a practice of a mutual fund custodian?
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?
Big Easy Investment Banking, Inc., is participating in an Eastern account underwriting of $10 million of municipal bonds by agreeing to underwrite 10% of the issue. One week later, $4 million remains unsold but Big Easy has distributed $1.5 million of bonds.
What is the liability of Big Easy remaining in the account?
A front-end loan mutual fund plan is most suitable for:
Which of the following does not decrease basis?
An advertisement for a CMO security by a member of FINRA should disclose which of the following?
Regulation T is set at 50%. Bubba’s account contains long positions in the following securities with the prices listed:
100 ABC $30
200 XYZ $70
200 QBB $40
200 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
Bubba wants to buy 100 shares of DUM at $30 per share and 100 shares of OUT at $120. How much additional money must be deposited?
Which of the following statements incorrectly describes US securities markets?
A case of leverage is:
Convertible preferred stock has all of the following characteristics except:
An excerpt from a recent tombstone ad reveals bonds offered publicly at 101.
Why were they priced at a premium?
As a general rule, when a partnership is terminated, in what order are assets distributed?
Which of the following activities by a limited partner may subject the partner to unlimited liability?
Reinvestment of dividends and distributions from investment company shares:
Which of the following would be least useful to an analyst making a technical market report?
Which of the following statements is pertinent to closed-end investment companies?
Municipal syndicate allocation procedures are described in which of the following?
How much currency is one mil worth?
Which of the following statements regarding mutual funds is true?
Crossover is best defined as:
An employer profit sharing plan may be described as:
What is the possible reward for investing in raw land?
In the distribution of a new issue underwriters or selling group member are prohibited from:
Bubba Corporation has a registered public offering of 500,000 shares at $36. Of these, 300,000 shares were authorized by unissued and 200,000 shares were sold on behalf of an affiliated person.
What is evident from this information?
The term “secondary market” refers to:
Bubba has a cash account and fails to make full and prompt payment for a purchase. The broker liquidated the transaction. Two weeks later, Bubba places another buy order for 100 shares of XYZ.
What does the broker do?
Bubba is eligible for a Roth IRA. He may convert his SEP-IRA to a Roth IRA:
Bubba decides to buy equity securities. Which of the following statements is always true about what Bubba is buying?
Which of the following does not affect the public offering price of a new issue?
Which of the following is not an intangible drilling cost?
A limit order is best describes as an order:
The gross spread in a new issue depends upon which of the following?
A buy-in of a customer’s sale transaction is mandated if the securities have not been received by the broker/dealer within how many business days following the settlement date:
In the offering of new securities, members of the syndicate are permitted to sell to other dealers less the reallowance. The amount of the reallowance is determined by:
Which of the following is true of treasury stock?
Which of the following would not be subject to the holding period restrictions under Rule 144?
The market theory stating that the small investor is usually wrong is called the:
In a corporation’s financial statements, earned surplus is also recognized as:
Which of the following must be true in order for an offering to qualify as an intrastate offering under Rule 147?
A mutual fund letter of intent may permissibly be predated for a period of time up to:
If a customer fails to pay for securities purchased in a cash account, the member firm broker will do which of the following?
Mutual fund salespersons may not represent that a product is like of safer than:
Upon opening a new account for a customer, a registered representative should:
In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600.
If the option expires without being exercised, how is the premium expense treated by Bubba?
Bubba held one XYZ July 30 listed call option when XYZ split 2 for 1.
What is the resulting position, Bubba has on the Option Clearing Corporation’s record?
In mid-September, Bubba sells one XYZ February 50 call at $6. It subsequently expires without being exercised.
How is the premium taxed?