Question 1

The process in which the buying firm must pay for the securities and the selling firm must deliver the securities is known as:

Options :

A : A corporate action

B : Clearing the trade

C : The settlement of the transaction

D : A delivery versus payment (DVP) transaction

Answer: C

Question 2

Shares in a private investment in public equity (PIPE) offering are priced:

Options :

A : At the current market value per share.

B : Below the current market value per share.

C : Above the current market value per share.

D : At the public offering price (POP) as determined by the underwriters.

Answer: B

Question 3

A customer buys 100 ABC at $50 and at the same time sells an ABC April 50 call at $8. At expiration, ABC must be at what market price for the customer to break even?

Options :

A : $42

B : $44

C : $50

D : $58

Answer: A

Question 4

The formation of an asset-backed security or debt obligation that represents a claim on the cash flows from mortgage loans is known as:

Options :

A : Securitization

B : Hypothecation

C : Loan processing

D : Claim processing

Answer: A

Question 5

On settlement date, a customer is unable to pay for a purchase in his cash account. His position is liquidated. Which of the following statements is true according to Federal Reserve Regulation T?

Options :

A : Only closing transactions are permitted.

B : The customer is barred from trading for 30 days.

C : The customer-s account is frozen for 90 days.

D : All related accounts are frozen for 90 days.

Answer: C

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