Question 1

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 2

Assuming yields are held constant, which of the following statements describes what will occur as a discount bond reaches maturity?

Options :

A : Its price increases.

B : Its price decreases.

C : Its par value increases.

D : Its par value decreases.

Answer: A

Question 3

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 4

A broker-dealer (BD) creates a marketing postcard that includes a statement regarding FINRA's endorsement of the BD. Which of the following responses is true?

Options :

A : The statement regarding FINRA-s endorsement is not permissible.

B : The statement is permissible if a principal of the BD approves it in writing prior to use.

C : The statement is permissible if the statement is approved in writing by FINRA prior to use.

D : The statement is permissible if the postcard does not discuss specific investment opportunities.

Answer: A

Question 5

Which of the following statements is true regarding 529 savings plans?

Options :

A : 529 contributions are tax deductible in all states

B : There are income limitations for contributing to a 529 savings plan.

C : The account beneficiary has control over the assets in a 529 savings plan.

D :

Assets are transferable to another 529 savings plan tax-free if the new beneficiary is a family member of the current beneficiary.

Answer: D

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