Question 1

The total of a mutual fund’s front-end load, rear-end load, and 12b-1 fees may not exceed:

Options :

A : 10.0% of the fund’s offer price.

B : 10.0% of the fund’s net asset value.

C : 8.5% of the fund’s offer price.

D : 8.5% of the average annual net assets of the fund.

Answer: C

Question 2

Which of the following statements regarding the purchase and redemption of mutual fund shares is false?

Options :

A : Mutual fund shares may not be purchased on margin.

B : An investor can both purchase and sell fractional shares of mutual funds.

C : When an investor redeems his shares, the mutual fund must pay for the shares within 7 business days.

D :

If an investor places an order to buy or redeem shares of a mutual fund before 4 P.M.EST on a day when the markets are open, the price will be based on the fund’s net asset value (NAV), as calculated at the end of that trading day.

Answer: C

Question 3

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 4

NASDAQ is:

Options :

A : an acronym for Norway’s major stock exchange.

B : the government organization that insures accounts at U.S. brokerage firms.

C : a computerized system that links together the U.S. regional exchanges.

D : a computerized quotation system used in the over-the-counter market.

Answer: D

Question 5

Glamourless Fund is a value fund. As such, it invests primarily in stocks with:

Options :

A : low cash dividend yields.

B : high betas.

C : high price-earnings ratios.

D : low earnings growth rates.

Answer: D

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