Question 1

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?

Options :

A : general obligation bonds issued municipalities

B : special tax bonds issued by municipalities

C : revenue bonds issued by municipal port authorities

D : new housing authority bonds issued by a public housing authority

Answer: D

Question 2

A dealer buys 100 shares of XYZ common, which is an actively traded stock, at 23.50.

Three days later, when XYZ common is quoted at 19.50 - 19.75, he sells the 100 shares to a customer. The basis for the dealer’s markup is:

Options :

A : 10 5/8

B : 19 7/8

C : 23 1/2

D : 5?ove cost

Answer: B

Question 3

Convertible preferred stock has all of the following characteristics except:

Options :

A : a lower dividend rate than non-convertible preferred

B : a dilution of earnings if converted into common stock

C : a requirement for shareholders to always accept the call price when called

D : required dividend payments to shareholders before any dividends are paid to holders of common stock

Answer: C

Question 4

Bubba is buying a treasury bill. The discount he receives results in Bubba’s determination of:

Options :

A : face value

B : nominal yield

C : rate of return

D : yield to call

Answer: C

Question 5

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?

Options :

A : 35,000

B : 36,000

C : 37,400

D : 38,500

Answer: B

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