Which of the following statements is true regarding separate accounts and general accounts?
both types of accounts are registered under the Investment Company Act of 1940
both types of accounts pay a guaranteed minimum return
the sub accounts of variable annuity may include both types of accounts
General accounts hold bonds while separate accounts hold equities
The method of determining the offering price of an open-end investment company is
shown in the prospectus
set by the SEC
the net asset value plus commission costs
based upon the supply and demand for securities
Which of the following is most likely to cause the nav of a bond mutual fund to decline?
the FED tightens the money supply
inflation decreases
the S&P 500 Index Rises at a 6% annual rate
the treasury Department Dotrice is the amount of treasury bills being issued
Upon examining the prospectus of an open-end investment company, you notice that the net investment income increased at a greater rate than did the gross investment income. From this fact you may assume that
there was an increase in the shares outstanding
the fund retained most of its dividend income for that period
the fund invested in growth companies stocks that are characterized as paying a low rate of dividends
the expenses of the fund increased at a lower rate over that period
What is covered by the code of procedure?
just and Equitable business conduct and Equitable principles of trade
standardization of trading practices in the OTC market among members
complaints involving Trade Practices of members
anti-fraud measures involving new issues
If the current dividend distribution of a company's common stock has increased by 7%, while the market price has increased by 9%, the current yield of this stock has
increased
decreased
remained the same
fluctuated greatly
Which of the following terms could be applied to a mutual fund that does not charge a front-end load or a contingent deferred sales charge, but which does have a 12b - 1 fee of 1%?
no load
level load
spread load
directly marketed fund
An insurance company May override a variable life policy holders right to I. Vote to change the investment policies of the separate account I I. Receive a proxy, if available Iii. Reject the selection of an investment adviser to the separate account
I only
2 and 3 only
one two and three
none of the above
When examining the bid and ask quotations of two over-the-counter stocks that you follow, you notice that the spreads between their bid and ask prices are dramatically different. From this, you could probably assume that
the stock with the narrower spread is more active than the stock with the wider spread
the stock with the wider spread is more active than the stock with the narrower spread
the stock with the wider spread will always be less expensive in the long run
no conclusion can be drawn from this information
Which of the following is not a characteristic of an exchange?
set standards for Securities that trade on it
provides a place for buyer and sellers of Securities to meet
is the market where investors usually buy and sell mutual funds
must comply with SEC rules
The net investment income from an open-end investment company consist of
all profits from the investment companies operation
dividends, interest, and net capital gains on sales of portfolio securities
only net capital gains on sales of portfolio securities
only net income from dividends and interest paid on Securities in the fund's portfolio
Someone is interested in international investing. The RR send the prospect a prospectus for an international Equity Fund. Which of the following May the RR do in order to help the client understand that the risks of the fund?
highlight the relevant sections of the prospectus
create a short summary of the funds risk and give it to the client
provide the client with supplemental sales literature about the fund
tell the client to ignore the prospectus and read the statement of additional information instead
An investor wishes to establish a tax loss but still wants to own the same security. The customer sells the security at a loss and repurchase is it two weeks later. The tax loss is
established
recognized
disallowed
amortized
The rep has prepared a script and a slide presentation for a seminar. She will also hand out a brochure created by her firm and a prospectus for the funds. And this situation all of the following should be filed with finra except
the script
the slide presentation
the prospectus
the brochure
Which of the following statements is true of both common and preferred stocks?
both have a fixed dividend
the board of directors must declare the dividends for both
both are guaranteed to receive an annual dividend
both have an equal vote on corporate issues
Which of the following employment activities would RRs not have to report to their employing broker-dealer
, part-time employment as a bartender
participating as a silent partner in a relative's business
acting as the manager of a sporting good store on the weekends
operating an internet business from home as a sole proprietor
When making a recommendation of a high-risk mutual fund to a customer, which of the following is least important?
financial status
tax status
investment objectives
ability to sustain a large loss
Which of the following is a municipal Bond? Back by the full faith and credit of the issuer?
debenture
a revenue Bond
GO Bond
an income bond
The cash value of a variable life insurance policy is calculated
daily
weekly
monthly
annually
An investor who writes a check on a mutual fund account is
borrowing money from a bank
drawing on a cash deposit
redeeming mutual fund shares
using a revolving charge facility
An investor has been investing $100 a month and a contractual plan that has a 50% sales charge in the first year and a 4% sales charge per year after the first. What is the total amount of sales charge paid during the first 17 months?
$93
$450
$600
$620
Which of the following investment companies will not charge a management fee?
open-end investment companies
closed-end investment companies
face amount certificate companies
unit Investment trusts
Which of the following would be found in a mutual fund prospectus?
a list of Securities in the fund's portfolio
the phone's current nav
a description of the management fee
a balance sheet
An individual invest $400 per month into a front-end load contractual plan for 12 months and now wishes to terminate the plan. How much would the individual receive upon termination of the plan?
the total amount invested
the value of the account plus the sales charge
the value of the account plus a portion of the sales charge
nothing
One Prime objective objective of the Investment Company Act of 1940 is to
ensure that practices on stock exchanges are similar throughout the country
control the OTC market and prevent another market crash
ensure that individual investors are provided with full and fair disclosure regarding securities
ensure that individuals investing in investment company shares are fully informed and fairly treated
The value of an Investor's interest in a variable annuity during the accumulation period it's subject to fluctuation according to the
AIR
amount of money deposited
performance of the separate account
A company declares dividend, payable on June 5th to stockholders of record on May 20th. An investor who buys the stock and a regular way transaction on Tuesday, May 19th
is entitled to the dividend
is not entitled to the dividend because the stock is already selling ex-dividend
is entitled to a due bill
cannot settle the trade until June 5th
The Johnsons want to purchase life insurance that will provide the potential for appreciation of future benefits, but are uncertain how much to purchase due to the unpredictable nature of Alan's income. Which of the following is the most appropriate
whole life insurance
variable life insurance
universal life insurance
variable universal life insurance
A method of voting that gives larger substantial stockholders a greater degree of voting power over the smaller, less substantial stockholders would be
statutory voting
cumulative
voting by proxy
special majority voting
And uncle is a custodian for his minor nephews account. The nephew receives rights to subscribe to additional shares of stock held in the account. As custodian, the uncle can
sell the rights
subscribe to the stock offering
buy additional rides to subscribe if additional rights are needed
do whatever he considers to be in the best interest of the minor
An open-end investment company with the objective of growth wishes to change its investment objectives to growth and income. This may be done with
a majority vote of outstanding shares
a majority vote of the outstanding shareholders
at least 90% consent of the outstanding shareholders
the unanimous vote of the board of directors
If a customer has been refused an extension after 5 business days and has not paid for stock, and member firm
must cancel or otherwise liquidate the transaction by selling out the Securities promptly
must Sue the customer for the money
May Grant an extension if the member Deans the customer to be reliable
must close the customer's account
An investor who is studying various funds Holdings is interested in an equity income fund. The investor would most likely choose a fun holding Securities of
companies that consistently an above average income
companies with a liberal payout ratios
growth companies
companies whose bonds are rated investment grade
The management fee that a mutual fund pays to its investment advisor is
based on the amount of assets under management
part of the acquisition cost the purchaser must pay
a cost to the sponsor of the fund
a non-recurring expense of the sponsor
A US Government Bond is selling in the Market at 95.28. The dollar value of this bond is
$950.87
$952.80
$958.75
$9,587.50
The customer receives a confirmation for a Securities transaction. The confirmation discloses that the broker-dealer acted in the capacity of a dealer. This means the firm acted
agent
intermediary
principal
broker
