EXAM FX TEST QUESTIONS # 1 2023 with 100% correct questions and answers

A PORTFOLIO MANAGER PURCHASES A BOND ON A YIELD-TO-CALL BASIS. THE BOND WAS TRADING AT A PREMIUM WHAT ACTIVITY CAN AN INVESTMENT COMPANY PERFORM WITHOUT SHAREHOLDER VOTE APPOINTMENT OF OFFICERS OF THE INVESTMENT COMPANY WHICH OF THE FOLLOWING AR ISSUED WITH A SPECIFIED, FIXED RATE OF INTEREST U.S. GOVERNMENT BONDS AND NOTES WHAT JOING ACCOUNT IS DESIGNED SPECIFICALLY FOR MARRIED COUPLES? TENANCY BY ENTIRETY WHAT IS TRUE REGARDING REGISTERED PERSONS ON IN-ACTIVE STATUS SERVING IN ACTIVE DUTY IN THE U.S. MILITARY. THEY CAN CONTINUE TO EARN COMMISSIONS TIPS ARE NOT ISSUED IN WHAT MATURITIES? 20 YEAR A BROKER/DEALER WITH A SALES AGREEMENT WITH A MUTUAL FUND UNDERWRITER MUST: OFFER NO DISCOUNT FROM THE POP. WHAT IS CONSIDERED A CONFLICT OF INTEREST IN A LIMITED PARTNERSHIP? THE GENERAL PARTNER SELF-DEALING TO INSURE PROFITS WITHOUT REGARD TO THE LIMITED PARTNERS THE GENERAL PARTNER HAS A FIDUCIARY RESPONSIBILITY TO THE LIMITED PARTNERS NAD CAN NOT ACT WITHOUT CONSIDERING THE LIMITED PARTNERS BEST INTEREST. A BACKGROUND CHECK MUST BE PERFORMED WITH HOW MANY DAYS AFTER THE FORM U-4 IS FILED WITH FINRA? 30 DAYS BUSINESS CONTINUTIY PLANS ARE REQUIRED TO ALL OF THE FOLLOWING EXCEPT PROTECTING MEMBER PROFITABILITY LUMP-SUM DISTRIBUTIONS WITHOUT PENALTY FROM QUALIFIED RETIREMENT PLANS MAY NOT BE MADE TO AN INDIVIDUAL FOR: 30 YEARS OF SERVICE WITH THE COMPANY. MUST BE 59 1/2 YEARS OF AGE ABC EQUITY FUND CHARGES A 12-1 FEE. THE FUNDS BOARD OF DIRECTORS MUST BE MADE UP OF AT LEAST: 51% UNAFFILIDATED DIRECTORS THE THEORY THAT REDUCING TAXES AND LIMITING GOVERNMENT INVOLVEMENT IN BUSINESS ACTIVITIES WILL STIMULATES ECONOMIC GROWTH IS CALLED: SUPPLY SIDE A GRANDFATHER FITS $1,000,000 TO HIS GRANDSON 'S UNIFROM GIFT TO MINORS ACT (UGMA) ACCOUNT . THE GRANDFATHER IS IN THE 33% TAX BRACKET, THE WIDOWED MOTHER IS IN 28% TAX BRACKET, AND THE SON IS LESS THAN 19 YEARS OLD. ANY UNEARNED INCOME IS TAXED TO THE MOTHER AT 28%. IF THE MINOR IS YOUNGER THAN 19 OR IS A FULL-TIME STUDENT THAT IS YOUNGER THAN 24 YEARS OLD, THE INCOME EXCEEDING $2,100 IS TAXED AT THE PARENTS RATE. A 35-YEAR OLD EMPLOYEE AND FIRST TIME HOMEBUYER WISH TO WITHDRAW $10,00 FROM HER IRA ACCOUNT FOR THE PURCHASE. THS PROVISION IS AVAILABLE FROM: TRADITIONAL AND ROTH IRA'S. THE HARDSHIP PROVISIONS IS AVAILABLE TO OWNERS BOTH TRADITIONAL AND ROTH IRA'S. An ASSOCIATED PERSON WHO ORIGINALLY REGISTERED IN 2012 AND IT'S NOW 2018. WHEN IS THE NEXT TIME THE INDIVIDUAL WOULD BE REQUIRED TO TAKE REGULATORY ELEMENT TRAINING 2020. REGULATORY TRAINING IS DUE ON THE SECOND ANNIVERSARY OF ORIGINAL REGISTRATION AND THEN EVERY 3 YEARS THEREAFTER. (2012 + 2 +3 +3) AN ASSOCIATED PERSON MAY BORROW MONEY FROM A CUSTOMER IF: THE CUSTOMER IS THE ASSOCIATED PERSON'S SISTER IN AN UGMA ACCOUNT: SECURITIES MUST BE REGISTERED IN THE NAME OF THE CUSTODIAN. ONLY ONE CUSTODIAN AND ONE MINOR CAN BE NAMED PER ACCOUNT. GIFTS MADE TO THE MINOR ARE IRREVOCABLE. AND MARGIN ACCOUNTS ARE NOT ALLOWED. THE HOLDER OF A CALL-OPTION ON A T-BOND WILL LOSS MONEY IF: WHEN YIELDS INCREASE AND PRICES DECREASE THE HOLDER OF A CALL-OPTION ON A T-BOND WILL PROFIT IF: YIELD ON T-BONDS DECREASE AND PRICES INCREASE WHICH OF THE FOLLOWING WOULD MEET THE MSRB'S DEFINITION OF A CUSTOMER? 1. A BANK TRUST OFFICER PURCHASING FOR TRUST ACCOUNT 2. A BANK DEALING IN MUNICIPAL BONDS 3. AN INVESTMENT ADVISOR HANDLING ACCOUNTS FOR CLIENTS 4. AN ISSUER BUYING A SECURITY IN THE SECONDARY MARKET. 1, 3, AND 4 ONLY. A CUSTOMER IS AN ENTITY NOT ENGAGED IN THE SALE OF SECURITIES IN A PROFESSIONAL CAPACITY. S0, ANSWER 2, IS A MUNICIPAL SECURITIES DEALER, THEREFORE A SALES PROFESSIONAL. WHAT CANDIDATE QUALIFICATIONS WOULD FINRA TAKES INTO CONSIDERATION WHEN WAIVING A QUALIFICATION EXAM REQUIREMENT? THE CANDIDATE HAS RELATED EXPERIENCE IN THE SECURITIES INDUSTRY OR INVESTMENT BANKING INDUSTRY. SHARES OF STOCK THAT HAVE ACTUALLY BEEN SOLD TO THE PUBLIC ARE: ISSUED STOCK AN U.S. GOVERNMENT BOND QUOTED AT 108.06-109.09 HAS AN ASKING PRICE OF: $1,092.81 THE ASK PRICE ( THE LAST PRICE QUOTED WOULD BE $1,090 + ( 9/32 TIMES $10 ) FOR A PRICE OF $1,092.81 IN WHICH OF THE FOLLOWING CIRCUMSTANCES IS A BROKER/DEALER ALLOWED TO SHARE NONPUBLIC INFORMATION OF CONSUMERS WITH NONAFFILIATED THIRD PARTIES? THE CUSTOMER HAS NOT ELECTED TO OPT OUT OF THE DISCLOSURE. WHEN A CUSTOMER BUYS A SECURITY IN THE SECONDARY MARKET, THE CUSTOMER WILL PAY: THE ASK PRICE. A MUNICIPAL FIRM MAKES A CONTRIBUTION THE THE COUNTY ASSESSOR IN THE COMMUNITY WHERE THEIR OFFICE WAS LOCATED, WHAT WILL OCCUR? THE FIRM WOULD BE UNABLE TO ENTER INTO A NEGOTIATED UNDERWRITING WITH THE MUNICIPALITY FOR 2 YEARS. :was created to govern securities transactions on the secondary market, after issue, ensuring greater financial transparency and accuracy and less fraud or manipulation. The Securities Exchange Act of 1934 Was established as a result of the stock market crash of 1929. It has two main goals: #1. To ensure more transparency in financial statements so investors can make informed decisions about investment #2. To establish laws against misrepresentation and fraudulent activities in the securities markets. The Securities Act of 1933 The strike price and premium of Treasury bond options are stated as a percentage of the: Face mount f the underlying security A broker/dealer with a sales agreement with a mutual funder underwriter must 1. Use only retail communication provided by the mutual fund 2. Offer no discounts from the pulic offering price 3. Not sell any securities to the fund from invesntory but may perform as a broker for the funds portfolios transactionsa. a. 2 and 3 b. 1 only c. 2 only d. 1 and 2 only C. 2 ONLY If a complaint is deemed to be of a minor nature by the District Business Conduct Comittie, it may offer the respondent which of the following? A. A simplified arbitration B. A fine not to exceeed $500 C. A fine not to exceed $500 and/ or a letter of reprimand D. A summary complaint procedure D. A summary complaint procedure Which of the following is NOT a risk factor to a limited partnership? a. Economic viability b. Very illiquid c. Risk of audit d. Conflicts of interest with sponsor A. Economic Viability Which of the following falls under the category of an exempt security A. Mutual fund B. U.S. Government bond C. Common stock D. Corporate Bond B. U.S. Government bond The ABC European Bond Fund invests in the debt of European corporations and other companies doing business in Europe. Investors in this fund are subject to all of the following risks EXCEPT A. Currency exchange risk B. Interest rate risk C. Inflation risk D. Liquidity Risk D. Liquidity Risk The maximum value of a gift allowed by FINRA Rules is A. $25 per gift B. $50 per person per year C. $100 per gift D. $100 per person per year D. $100 per person per year Business Continuity Plans are required to address all of the following EXCEPT: A. Regulatory reporting B. Protecting member profitability C. Customer communication's D. Data backup and recovery B. Protecting member profitability The options positions limit on XYZ stock is 200,000 contracts. Bob (a high roller) is short 150,000 XYZ Dec 50 puts. wWhich of the following trades would put Bob in violation of position limits? A. Buy 60,00 XYZ Mar 60 Calls B. Write 100,000 XYZ Dec 60 Calls C. Buy 100,000 XYZ Mar 60 puts D. Buy 60,000 XYZ Dec 50 puts CORRECT ANSWER: A. BUY 60,000 XYZ MAR 60 CALLS BOB IS SHORT PUTS, A BULLISH POSITION. IF HE BUYS 60,000 CALLS, HE WILL HAVE 210,000 CONTRACTS ON THE SAME SIDE OF THE MARKET. BUYING 60,000 XYZ DEC 50 PUTS WILL REDUCE HIS POSITION. WRITING CALLS AND BUYING PUTS ARE BEARISH POSITIONS. The organization that provides custody services for securities certificates safekeeping is known as: A. Financial Industry Regulatory Authority B. Depository Trust and Clearing Corporation C. Securities and Exchange Commission D. Federal Reserve Bank B. Depository Trust and Clearing Corporation In a custodian account, the responsibility for tax liabilities from dividends, interest income and capital gains belongs to: Minor The insider Trading Act of 1988 has set guideline for imposing penalties including civil actions in federal court. The maximum penalty a court can impose for insider trading violations is: An amount up to 3 times the profit gained or loss avoided