Question 1

The FINRA markup policy applies to:

Options :

A : agency sales OTC

B : principal transactions in municipal bonds

C : mutual fund sales

D : new issues of corporate securities

Answer: A

Question 2

The most common type of bond issued by a well-established company is:

Options :

A : a debenture

B : a senior secured note

C : a convertible

D : an open-end mortgage

Answer: A

Question 3

Which of the following has the greatest risk?

Options :

A : a guaranteed corporate bond

B : a GNMA bond

C : a Series H bond

D : a treasury bill

Answer: A

Question 4

Convertible preferred stock has all of the following characteristics except:

Options :

A : a lower dividend rate than non-convertible preferred

B : a dilution of earnings if converted into common stock

C : a requirement for shareholders to always accept the call price when called

D : required dividend payments to shareholders before any dividends are paid to holders of common stock

Answer: C

Question 5

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