Question 1

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 2

Which of the following would not have to register as an investment adviser or an investment adviser representative under the Investment Advisers Act of 1940? I. an insurance agent who sells only whole life and term life policies II. a commodity futures broker III. a bank employee who sells the bank’s customers only CDs and other bank securities that are FDIC-insured IV. a person that is registered as a broker-dealer with the SEC that also provides investment advice to its customers for additional compensation

Options :

A : I and III only

B : I, II, and III only

C : II and III only

D : I, II, III, and IV

Answer: B

Question 3

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 4

Which of the following do not fall under the category of “advertisement,” as defined by FINRA? I. scripts used in telemarketing the products of the member firm II. a website maintained by the member firm III. research reports that the member firm distributes to both its existing clients and its prospective clients IV. sales material that a member firm distributes only to its institutional clients

Options :

A : I only

B : IV only

C : I, III, and IV only

D : III and IV only

Answer: C

Question 5

Which of the following formulae is used to calculate the net dividend income per share of a mutual fund?

Options :

A :

Subtract operating expenses from dividend and interest income and divide the result by the number of outstanding shares.

B : Divide gross investment income by the number of outstanding shares.

C :

Subtract operating expenses from the income derived from dividends, interest, and short -term capital gains earned by the fund and divide the result by the number of outstanding shares.

D :

Add dividends, interest, and short-term and long-term capital gains earned by the fund; subtract operating expenses; then divide the result by the number of outstanding shares.

Answer: A