Mastery Exam 2026 Exam
Questions and Answers |
Already Graded A+
In a cash account, an investor must pay for a purchase by:
A) depositing at least 50% of the purchase price by settlement.
B) depositing the entire amount of the trade by the settlement day.
C) having at least 50% of the trade in the account.
D) having the cash available in the account. - ANSWER ✔✔C) having
at least 50% of the trade in the account.
,In a cash account, 100% of the funds required to pay for a purchase
must be deposited in the account by the settlement day. Funds are only
required beforehand if the account is frozen.
The residents of the city of Sandy Place, California, recently voted in
favor of issuing a bond. The proceeds of the bond will be used to build a
baseball stadium for the local minor league baseball team. Though the
bond's costs are expected to be covered by the ticket revenue from the
stadium, the bond contains a provision that requires the city to pay the
bond's interest payments as well as pay the principal at maturity if the
ticket sales are insufficient. This bond is an example of:
A) a general obligation municipal bond.
B) a mortgage bond.
C) a senior debenture.
D) a revenue municipal bond. - ANSWER ✔✔A) a general obligation
municipal bond.
This is a type of municipal bond called a double-barrel bond. Though
revenue from ticket sales will be used to pay for the bond, ultimately, the
cost of the bond may fall back on the taxpayer. That makes this a GO
,and is why, unlike a revenue bond, the issue had to be approved by the
residents of Sandy Place in a vote.
Your customer notices that the Japanese yen puts he is considering are
European style and asks you what that means. Which of the following
statements is correct?
A) This means that exercise instructions may only be entered if the
intrinsic value of the option is within 10% of the strike price.
B) This means that the customer may enter exercise instructions at any
time.
C) This means that the options will automatically exercise at expiration.
D) This means that the option may only be exercised on the last trading
day before expiration. - ANSWER ✔✔B) This means that the
customer may enter exercise instructions at any time.
A European style exercise option may only be exercised on the final
trading day. American style may be exercised at any time prior to
expiration. Only options expiring in the money are automatically
exercised.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, Regular way settlement for the purchase of an equity option occurs
A) two business days after the trade date.
B) one business day after the trade date.
C) the same business day as the trade date.
D) three business days after the trade date. - ANSWER ✔✔C) the
same business day as the trade date.
An equity option trade settles the next business day (T+1).
Janet Johnson, a registered representative and licensed insurance
agent, meets in the home with a 50-year-old widower to discuss what to
do with life insurance proceeds of his deceased spouse. The widower is
apprehensive about liquidity. Johnson hands him a prospectus for a
variable annuity and recommends the funds be conservatively invested
in separate accounts within the annuity. Johnson takes time to carefully
explain and illustrate a 6% gross return over a 20-year period and further
explains that earnings will grow tax deferred. What did Johnson do
wrong?
Questions and Answers |
Already Graded A+
In a cash account, an investor must pay for a purchase by:
A) depositing at least 50% of the purchase price by settlement.
B) depositing the entire amount of the trade by the settlement day.
C) having at least 50% of the trade in the account.
D) having the cash available in the account. - ANSWER ✔✔C) having
at least 50% of the trade in the account.
,In a cash account, 100% of the funds required to pay for a purchase
must be deposited in the account by the settlement day. Funds are only
required beforehand if the account is frozen.
The residents of the city of Sandy Place, California, recently voted in
favor of issuing a bond. The proceeds of the bond will be used to build a
baseball stadium for the local minor league baseball team. Though the
bond's costs are expected to be covered by the ticket revenue from the
stadium, the bond contains a provision that requires the city to pay the
bond's interest payments as well as pay the principal at maturity if the
ticket sales are insufficient. This bond is an example of:
A) a general obligation municipal bond.
B) a mortgage bond.
C) a senior debenture.
D) a revenue municipal bond. - ANSWER ✔✔A) a general obligation
municipal bond.
This is a type of municipal bond called a double-barrel bond. Though
revenue from ticket sales will be used to pay for the bond, ultimately, the
cost of the bond may fall back on the taxpayer. That makes this a GO
,and is why, unlike a revenue bond, the issue had to be approved by the
residents of Sandy Place in a vote.
Your customer notices that the Japanese yen puts he is considering are
European style and asks you what that means. Which of the following
statements is correct?
A) This means that exercise instructions may only be entered if the
intrinsic value of the option is within 10% of the strike price.
B) This means that the customer may enter exercise instructions at any
time.
C) This means that the options will automatically exercise at expiration.
D) This means that the option may only be exercised on the last trading
day before expiration. - ANSWER ✔✔B) This means that the
customer may enter exercise instructions at any time.
A European style exercise option may only be exercised on the final
trading day. American style may be exercised at any time prior to
expiration. Only options expiring in the money are automatically
exercised.
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2026. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, Regular way settlement for the purchase of an equity option occurs
A) two business days after the trade date.
B) one business day after the trade date.
C) the same business day as the trade date.
D) three business days after the trade date. - ANSWER ✔✔C) the
same business day as the trade date.
An equity option trade settles the next business day (T+1).
Janet Johnson, a registered representative and licensed insurance
agent, meets in the home with a 50-year-old widower to discuss what to
do with life insurance proceeds of his deceased spouse. The widower is
apprehensive about liquidity. Johnson hands him a prospectus for a
variable annuity and recommends the funds be conservatively invested
in separate accounts within the annuity. Johnson takes time to carefully
explain and illustrate a 6% gross return over a 20-year period and further
explains that earnings will grow tax deferred. What did Johnson do
wrong?
