Question 1

The civil penalty for an individual who is convicted of an insider trading violation is permitted to be an amount up to how many times the profit gained or loss avoided?

Options :

A : 1 time

B : 3 times

C : 6 times

D : 10 times

Answer: B

Question 2

Assuming yields are held constant, which of the following statements describes what will occur as a discount bond reaches maturity?

Options :

A : Its price increases.

B : Its price decreases.

C : Its par value increases.

D : Its par value decreases.

Answer: A

Question 3

Shares in a private investment in public equity (PIPE) offering are priced:

Options :

A : At the current market value per share.

B : Below the current market value per share.

C : Above the current market value per share.

D : At the public offering price (POP) as determined by the underwriters.

Answer: B

Question 4

A customer buys 100 ABC at $50 and at the same time sells an ABC April 50 call at $8. At expiration, ABC must be at what market price for the customer to break even?

Options :

A : $42

B : $44

C : $50

D : $58

Answer: A

Question 5

Which of the following statements best describes an American Depositary Receipt (ADR)?

Options :

A : ADRs trade like U.S. issues and are quoted in U.S. dollars.

B : ADRs trade like U.S. issues and are quoted in foreign currency.

C : ADRs represent shares of a U.S. security held in foreign commercial banks.

D : ADRs represent shares of a foreign security held in foreign commercial banks.

Answer: A