Question 1

Bubba is buying a treasury bill. The discount he receives results in Bubba’s determination of:

Options :

A : face value

B : nominal yield

C : rate of return

D : yield to call

Answer: C

Question 2

Which of the following pays interest at maturity only?

Options :

A : a corporate serial bond

B : US treasury bills

C : Income bonds

D : Series H savings bonds

Answer: B

Question 3

Which of the following best describes phantom income?

Options :

A : income from deductions and tax credits

B : the non-taxable portion of a distribution

C : income received but not reported

D : income reported but not received

Answer: D

Question 4

Which of the following is not usually an additional function of a mutual fund’s custodial bank?

Options :

A : transfer agent

B : investment advisor

C : registrar

D : dividend disbursing agent

Answer: B

Question 5

Bubba owns stock with cumulative voting rights. There are five vacancies on a board and he owns 100 shares of stock. Bubba is entitled to cast the following votes:

Options :

A : a total of 100 votes

B : a total of 100 votes per

C : a total of 500 votes

D : you are not allowed to vote

Answer: C