Question 1

An investment company incapable of issuing a long-term debt instrument is:

Options :

A : a face-amount certificate company

B : a unit investment trust

C : a closed-end investment company

D : an open-end investment company

Answer: D

Question 2

A call option is in the money when the market value of the underlying stock is:

Options :

A : lower than the strike price of the option

B : the same as the strike price of the option

C : higher than the strike price of the option

D : higher than the strike price plus the premium

Answer: C

Question 3

Which of the following activities by a limited partner may subject the partner to unlimited liability?

Options :

A : participating in management of the partnership

B : committing the partnership in any manner

C : making loans beyond those specified in the partnership agreement

D : all of the above

Answer: D

Question 4

A trust instrument drawn pursuant to the Trust Indenture Act of 1939 sets forth which of the following?

Options :

A : the rights of stockholders

B : the duties of the trustee

C : the obligations of the issuing corporation

D : both B and C

Answer: D

Question 5

Bubba is opening a margin account with a member organization. He wishes to purchase 100 shares of XYZ at $15 per share. What is Bubba’s initial cash deposit?

Options :

A : $375

B : $1,050

C : $1,500

D : $2,000

Answer: C