What securities should a 50-year old investor purchase if the goal is tax-free income?
A preferred stock inside of a Traditional IRA.
A Treasury Bond.
A municipal bond.
A fixed rate annuity.
Which of the following is a violation of FINRA conduct rules?
A registered representative who purchases a security before he buys many shares of it for a customer's account, with advance knowledge of the customer's order.
Using soft dollars to purchase investment research.
Neglecting to present a prospectus prior to selling an investment to a prospect.
A member firm fails to register a broker's assistant.
A corporate bond selling on the secondary market has a price of 96 and a coupon rate of 4.25%. What is the current yield for this bond?
Rule 17f-2 of the Securities Exchange Act requires:
Registration of securities to be traded in the secondary market
Fair trade practices with both customers and non-customers
Broker-dealers to register with the SEC
Principals, officers, and certain employees of member firms to be fingerprinted
Which of the following is true regarding the "combination privilege" and mutual funds?
It allows family members to pool their investments in order to take advantage of break point pricing.
It allows an investor to pool her investments from multiple funds from the same family of funds for the purpose of receiving breakpoint pricing.
It allows investors to receive financial reporting for several mutual funds on a single financial statement.
None of the choices listed.
Which of the following markets includes the Pink Sheets?
Which of the following annuity settlement options is likely to offer the lowest monthly payment?
Insufficient information to answer the question
Joint and survivor annuity
Life with five year period certain annuity
Which of the following are considered "generic advertising"?
I. a brochure about an individual mutual fund
II. a brochure about an entire mutual fund family
III. an educational brochure from XYZ mutual funds that solely explains the basics of asset allocation
IV. a magazine insert that allows a reader to request more information about certain types of funds
I, II, and IV
I, II, III, and IV
III and IV
I and II
Communications with which of the following entities would be considered "institutional communications"?
II. An individual with $25 million in assets
III. A Section 457 plan with 60 clients
IV. A government entity
II, III, and IV
I and IV
I, II, and III
All of the following are possible structural classifications of mutual funds EXCEPT:
diversified and nondiversified
equity and bond
all the choices are correct
open-ended and closed-ended
When opening an account for a customer who is a natural person, a broker-dealer must ask for (but not necessarily receive) what of the following information, assuming the broker-dealer will make recommendations to the customer?
I. The social security number or tax identification number of the account owner
II. Investment objectives
III. Estimated income and net worth
IV. Occupational information
I and III only
I, II, and III only
I and II only
Alice, a registered representative, and Bob, a customer, are having a dispute after the variable annuity she sold him just lost value. Bob says that he can't afford to lose income on his investments, so the product Alice sold him was unsuitable. Alice claims that Bob indicated that he was willing to take on risk to increase his potential returns. Alice and Bob each suspect that the other is not acting in good faith and refuse to talk directly to each other. How will the dispute most likely be resolved?
A Oregon hazelnut farm exports all of their hazelnuts to China and a Chinese trampoline manufacturer exports all of their trampolines to the U.S. Which of the following is true?
Both the hazelnut farm and the Chinese trampoline manufacturer prefer a weak dollar
The hazelnut farm prefers a strong dollar and the Chinese trampoline manufacturer prefers a weak dollar
Both the hazelnut farm and the Chinese trampoline manufacturer prefer a strong dollar
The hazelnut farm prefers a weak dollar and the Chinese trampoline manufacturer prefers a strong dollar
Use the following data to answer this question:
I. Primary Residence:
Fair Market Value $800,000
Outstanding Mortgage $150,000
Joint Brokerage Account $130,000
Joint Bank Account $70,000
Vacation Home Fair Market Value $400,000
Outstanding Mortgage $0
II. Primary Residence:
Fair Market Value $500,000
Outstanding Mortgage $0
Joint Brokerage Account $300,000
Joint Bank Account $150,000
Investment Property: Fair Market Value $300,000
Outstanding Mortgage $50,000
III. Primary Residence:
Fair Market Value $400,000
Outstanding Mortgage $200,000
Joint Brokerage Account $250,000
Joint Bank Account $250,000
Individual Brokerage Account $300,000
Individual Bank Account $250,000
Without consideration to income, which of the above net worth scenarios would qualify a married couple for classification as accredited investors?
None of the above scenarios meet the asset requirements
I, II, and III
The federal legislation that requires issuers of securities to register the securities and provide full disclosure to investors is:
The Securities Exchange Act of 1934
The Securities Act of 1933
The Investment Company Act of 1940
The Uniform Sales of Securities Act of 1930
XYZ stock is selling for $60 per share with a quarterly dividend of $0.40. The current yield for XYZ is
All of the following entities are exempt from the securities registration requirements of the Paper Act EXCEPT
Berkshire Hathaway common stock.
the U.S. Treasure Department.
the state of New Jersey.
If there is activity in a customer's account, statements must be sent:
For representatives whose telemarketing activities are subject to the tape-recording rule, when must the reports reviewing those taped conversations be submitted to FINRA?
Twice a year
Within 30 days of the end of each quarter
Within 30 days of the end of each month being monitored
Which type of risk would a registered representative be least likely to emphasize to their clients about inverse leveraged ETFs?
They are designed to meet their goals on a daily basis, and their goals are reset daily which can lead to large tracking errors
The fund is betting the opposite direction of the market that they are tracking
The underlying securities of leveraged ETFs are more liekly to default
Managers rely on complicated investment strategies such as derivatives, swaps, and futures contracts that can lead to high volatility in returns
According to FINRA, the duties of a registered principal include all of the following except:
Opening all new accounts
Initialing all order tickets
Handling all written customer complaints
Annuities are considered to be:
III. retirement vehicles
I and III
II, III and IV
II and III
I, II, III and IV
Which of the following departments of a member firm is responsible for sending out order confirmations?
Purchasing and sales
The FINRA Conduct Rules consider an email to be corresponsdence if it meets all of the following conditions EXCEPT
the email was sent to all customers within a 30-day period
it was sent to less than 25 prospective retail customers
All of these conditions would be considered correspondence.
the email was sent to a single customer
On what financial reporting document must a broker-dealer indicate that it is not a member of SIPC?
ADV Part II
ADV Part I
John is developing promotional material for Megafund, an investment company. The material compares Megafund's performance over the past ten years against five other investment companies, based on information provided by Megafund. Once the material gets the required approval, John will send the material out to potential customers and to broker-dealers who will send it out to their customers. Which of the following are true?
I. The promotional material will require prior principal approval
II. John will need to send the material to FINRA 10 days prior to its first use
III. John will need to send the material to FINRA within 10 days of its first use
IV. If the broker-dealers do not change the promotional material as is to their customers, they will need to re-file it with FINRA
II and IV
All of the following are considered low-cost methods of investing in a broad stock market portfolio EXCEPT:
Open-end mutual funds
Martha is worried about another bear market and wants you, her registered representative, to position her portfolio defensively. What would be an appropriate investment for Martha?
An equity income fund
A small cap growth fund
An energy services fund
A technology fund
Securities held in UTMA/UGMA accounts are owned by:
On the floor of an exchange, who is responsible for maintaining a fair and orderly market in a security?
NASDAQ market maker
According to FINRA, the fundamental responsibility all registered representatives have in common when it comes to working with customers is:
What is the maximum contribution a 55-year old person might be able to make to a Roth IRA in 2013?
Which of the following is biggest risk of leveraged ETFs?
Large tracking errors
Interest rate risk
When the US Treasury sells bonds, the price of the securities may be _________________ the bond's par amount.
all of the choices listed
David is considering an investment with the following characteristics: actively managed and invests exclusively in Asia, currently trades at a premium to the value of its underlying investments and can be bought and sold on the New York Stock Exchange, not redeemable, uses leverage to increase returns. What type of security is David considering?
Unit investment trust