Question 1

The expiration date of a listed option is:

Options :

A : the last day of the expiration month

B : the third Saturday of the expiration month

C : the Saturday following the third Friday of the expiration month

D : the third Friday of the expiration month

Answer: C

Question 2

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 3

A leveraged company is best described as one that has a small portion of its capitalization represented by:

Options :

A : common stock

B : preferred stock

C : debentures

D : convertible bonds

Answer: A

Question 4

Bubba decides to buy equity securities. Which of the following statements is always true about what Bubba is buying?

Options :

A : they are readily marketable

B : they have a fixed rate of return

C : they have a fixed maturity date

D : they are not secured by collateral

Answer: D

Question 5

Assuming that the information contained in a registration statement is complete and accurate, the registration statement becomes effective:

Options :

A : 10 days after receipt by the SEC

B : 20 days after receipt by the SEC

C : 30 days after receipt by the SEC

D : only after the SEC specifically clears the issue in writing to the principal underwriter

Answer: D