Question 1

Which of the following is not a characteristic of all auction stock exchanges in the U.S.? the exchange.

Options :

A : There is a central marketplace.

B : Stocks that are traded on the exchange must meet certain listing requirements, determined by the exchange.

C :

In order to conduct a trade on the exchange, a broker must be a member of the exchange or hold a license to trade on the exchange.

D : If a stock is listed on one of these exchanges, it is not permitted to be listed on any other exchange.

Answer: D

Question 2

Dottie is a newly-minted, registered representative and is doing some cold calling to line up appointments with prospects. When doing so, Dottie: I. must not call anyone on her firm’s do-not-call list. II. must not call anyone on the FTC’s national do-not-call-list. III. must not call anyone before 7 a.m. or after 7 p.m., based on the time zone of the person being called. IV. must provide the person called with her name, the name and contact information of her firm, and the purpose of her call.

Options :

A : I and III only

B : I and IV only

C : I, II, and IV only

D : I, II, III, and IV

Answer: C

Question 3

Phil Anthropy wrote his cousin a $15,000 check to pay for medical bills the cousin had accumulated. He also distributed $5,000 checks to three nephews who were in college, and gave his mother a check for $12,000. Have Phil’s actions triggered any gift taxes?

Options :

A : Yes, $19,000 of his total distributions is subject to the gift tax.

B : Yes, $2,000 of his total distributions is subject to the gift tax.

C : Yes, $7,000 in distributions is subject to the gift tax.

D : No. None of Phil’s distributions is subject to the gift tax.

Answer: B

Question 4

Which of the following statements regarding CMOs is false?

Options :

A : CMOs are zero-coupon bonds that are backed by real estate.

B : Relative to other bonds, CMOs are illiquid.

C : CMO investors are divided into classes, and the class determines when the investor will receive payments of principal.

D : CMOs are considered to have lower risk and, therefore, offer lower returns.

Answer: A

Question 5

Which of the following steps in the underwriting process will occur last?

Options :

A : The underwriting syndicate is formed.

B : The selling group is organized.

C : The public offering price is set.

D : A red herring prospectus is circulated to the public.

Answer: C

Higher Test Marks with Free Online Series-6 Exam Practice

Buying Options: