Question 1

An investor wants to purchase mutual fund shares, but she is concerned about the tax efficiency of the fund. Which of the following disclosures required under industry regulations will help the investor make an informed decision?

Options :

A : The fund-s turnover ratio

B : Sales charges and breakpoint discount opportunities

C : The commissions that the fund pays on each transaction

D : Projections of future dividend and capital gains distributions

Answer: A

Question 2

A real estate investment trust (REIT) is required to invest what percentage of total assets in real-estate-related assets to maintain favorable tax treatment?

Options :

A : At least 50% of total assets

B : At least 75% of total assets

C : At least 90% of total assets

D : 100% of assets

Answer: B

Question 3

A municipal securities dealer makes a political contribution of $990 to a local mayoral candidate. At the end of the quarter, to whom, if anyone, must the dealer report the contribution?

Options :

A : SEC

B : MSRB

C : FINRA

D : No disclosure required as the amount is below the reporting threshold

Answer: B

Question 4

The formation of an asset-backed security or debt obligation that represents a claim on the cash flows from mortgage loans is known as:

Options :

A : Securitization

B : Hypothecation

C : Loan processing

D : Claim processing

Answer: A

Question 5

Executing trades using the delivery versus payment (DVP) settlement process requires the buyer to make a cash payment by which of the following deadlines?

Options :

A : On the 5th business day after execution

B : Before or at the same time as securities being delivered

C : No later than 3 days after the securities are delivered

D : By the agreed-upon settlement date with the issuer

Answer: B

Smartly Prepare Exam with Free Online SIE Practice Test

Buying Options: