Practice Test Series 65
what is the equation for operating margin? - correct answer ✔✔net profit / revenue
what type of risk does beta calculate? - correct answer ✔✔systematic risk, risk of a single security
compared to the market as a whole
what type of risk is eliminated if you always hold a bond until maturity? - correct answer ✔✔interest
rate risk
can preferred stock ever be called back by a company? - correct answer ✔✔yes
do you have voting rights if you hold an ADR? - correct answer ✔✔no
what are some things that fundamental analysts look for? - correct answer ✔✔fiscal policy, money
supply, industry analysis, monetary policy, interest rates, and the economic environment.
what type of risk does a zero coupon bond not have? - correct answer ✔✔reinvestment risk
what should be associated with OTC markets? - correct answer ✔✔massive market, trades government
securities etc
does a corporation have to pay a production tax? - correct answer ✔✔no
what is an Alien Corporation? - correct answer ✔✔incorporated in a country other than the United
States
what is a Foreign Corporation? - correct answer ✔✔conducts business outside of the state of its
incorporation
, what are examples of penalty free withdrawals from a traditional IRA? - correct answer ✔✔medical bills,
tuition expenses, first time home purchase, disability, beneficiary of deceased who previously held IRA
when can a short sale take place? - correct answer ✔✔Only on an up-tick or zero-uptick price movement
when you inherit a security what is your cost basis? - correct answer ✔✔when the death occurs the fair
value of the security is your cost basis, and it is always a long term gain
what is a way to combat the probate court process? - correct answer ✔✔setting up a trust
to determine a fair price to charge as a commission what should be considered? - correct answer ✔✔the
type of security, current market price and conditions, size of the purchase, amount of time and expense
involved, and the nature of the member's business
when people are getting old what should you estimate their time horizon to be? - correct answer
✔✔reasonably long because life expectancies are high
do individuals have balance sheets? - correct answer ✔✔yes
what is the difference between a market maker and a specialist? - correct answer ✔✔A specialist works
on the floor of an exchange like the NYSE to maintain an orderly market in assigned stocks, when a
market maker does the same thing in OTC markets
can you convert a 401(k) directly into a roth IRA? - correct answer ✔✔no, it must be in a traditional ira
first
what is an example of a non qualified retirement plan? - correct answer ✔✔plan 457 (government
employees)
how long do IAs have to maintain books? - correct answer ✔✔Five years from the end of the fiscal year
during which the last entry was recorded
what is the equation for operating margin? - correct answer ✔✔net profit / revenue
what type of risk does beta calculate? - correct answer ✔✔systematic risk, risk of a single security
compared to the market as a whole
what type of risk is eliminated if you always hold a bond until maturity? - correct answer ✔✔interest
rate risk
can preferred stock ever be called back by a company? - correct answer ✔✔yes
do you have voting rights if you hold an ADR? - correct answer ✔✔no
what are some things that fundamental analysts look for? - correct answer ✔✔fiscal policy, money
supply, industry analysis, monetary policy, interest rates, and the economic environment.
what type of risk does a zero coupon bond not have? - correct answer ✔✔reinvestment risk
what should be associated with OTC markets? - correct answer ✔✔massive market, trades government
securities etc
does a corporation have to pay a production tax? - correct answer ✔✔no
what is an Alien Corporation? - correct answer ✔✔incorporated in a country other than the United
States
what is a Foreign Corporation? - correct answer ✔✔conducts business outside of the state of its
incorporation
, what are examples of penalty free withdrawals from a traditional IRA? - correct answer ✔✔medical bills,
tuition expenses, first time home purchase, disability, beneficiary of deceased who previously held IRA
when can a short sale take place? - correct answer ✔✔Only on an up-tick or zero-uptick price movement
when you inherit a security what is your cost basis? - correct answer ✔✔when the death occurs the fair
value of the security is your cost basis, and it is always a long term gain
what is a way to combat the probate court process? - correct answer ✔✔setting up a trust
to determine a fair price to charge as a commission what should be considered? - correct answer ✔✔the
type of security, current market price and conditions, size of the purchase, amount of time and expense
involved, and the nature of the member's business
when people are getting old what should you estimate their time horizon to be? - correct answer
✔✔reasonably long because life expectancies are high
do individuals have balance sheets? - correct answer ✔✔yes
what is the difference between a market maker and a specialist? - correct answer ✔✔A specialist works
on the floor of an exchange like the NYSE to maintain an orderly market in assigned stocks, when a
market maker does the same thing in OTC markets
can you convert a 401(k) directly into a roth IRA? - correct answer ✔✔no, it must be in a traditional ira
first
what is an example of a non qualified retirement plan? - correct answer ✔✔plan 457 (government
employees)
how long do IAs have to maintain books? - correct answer ✔✔Five years from the end of the fiscal year
during which the last entry was recorded
