Question 1
A security is represented by an interest in which of the following?
I. farmland or animals
II. a cooperative
III. a marketing scheme
IV. a multilevel distributorship
a) none of these
b) I and II
c) I, II, and III
d) I, II, III, and IV
CORRECT ANSWER
D
Question 2
A representative, seeking indications of interest for a new issue of common stock that her
firm is underwriting, includes a research report on the company along with the
preliminary prospectus. Which of the following is true?
a) this is permitted because it will help the investor make a well informed decision
b) this is permitted as long as the principal approves the report
c) this is permitted as long as the stick will be listed on the Nasdaq or NYSE
d) this is not permitted under any circumstances
CORRECT ANSWER
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, D
Question 3
Performance-based compensation for an institutional portfolio manager managing a small
cap fund would likely be based on which of the following benchmarks?
a) S&P 500
b) Nasdaq 100
c) Russell 2000
d) Dow Jones Industrial Average
CORRECT ANSWER
C
Question 4
All of the following are considered securities, EXCEPT:
a) whiskey warehouse receipts
b) a trust indenture
c) a commodity future option
d) interest in a marketing scheme
CORRECT ANSWER
B
Question 5
An investment strategy you may employ if you believe economic cycles are unpredictable
would be:
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,a) buy and hold
b) technical analysis
c) fundamental analysis
d) efficient market allocation
CORRECT ANSWER
A
Question 6
The purchaser of a fixed annuity would be affected most by:
a) GDP
b) CPI
c) systematic risk
d) nonsystematic risk
CORRECT ANSWER
B
Question 7
An exception from the definition of an investment adviser is NOT given to:
a) a publisher
b) someone who gives advice on industrial revenue bonds
c) broker dealers and their agents
d) banks and trust companies
CORRECT ANSWER
B
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, Question 8
Which view of the efficient market hypothesis would say that you can make money based
on insider information?
I. weak
II. semistrong
III. strong
IV. correlated
a) I and II
b) I only
c) III only
d) III and IV
CORRECT ANSWER
A
Question 9
Both the _____ and _______ views of efficient market hypothesis believe that unknown
inside information is not reflected in asset prices and could be used to earn a profit; the
______ view of this theory believes that prices in the marketplace reflect only past
information regarding a security; the ________ view believes that prices reflect all past
and current publicly available information regarding a security; the ______ view believes
that past, present, and even nonpublic information is already reflected in a security's
price.
CORRECT ANSWER
weak semistrong weak semistrong strong
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A security is represented by an interest in which of the following?
I. farmland or animals
II. a cooperative
III. a marketing scheme
IV. a multilevel distributorship
a) none of these
b) I and II
c) I, II, and III
d) I, II, III, and IV
CORRECT ANSWER
D
Question 2
A representative, seeking indications of interest for a new issue of common stock that her
firm is underwriting, includes a research report on the company along with the
preliminary prospectus. Which of the following is true?
a) this is permitted because it will help the investor make a well informed decision
b) this is permitted as long as the principal approves the report
c) this is permitted as long as the stick will be listed on the Nasdaq or NYSE
d) this is not permitted under any circumstances
CORRECT ANSWER
1
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, D
Question 3
Performance-based compensation for an institutional portfolio manager managing a small
cap fund would likely be based on which of the following benchmarks?
a) S&P 500
b) Nasdaq 100
c) Russell 2000
d) Dow Jones Industrial Average
CORRECT ANSWER
C
Question 4
All of the following are considered securities, EXCEPT:
a) whiskey warehouse receipts
b) a trust indenture
c) a commodity future option
d) interest in a marketing scheme
CORRECT ANSWER
B
Question 5
An investment strategy you may employ if you believe economic cycles are unpredictable
would be:
2
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,a) buy and hold
b) technical analysis
c) fundamental analysis
d) efficient market allocation
CORRECT ANSWER
A
Question 6
The purchaser of a fixed annuity would be affected most by:
a) GDP
b) CPI
c) systematic risk
d) nonsystematic risk
CORRECT ANSWER
B
Question 7
An exception from the definition of an investment adviser is NOT given to:
a) a publisher
b) someone who gives advice on industrial revenue bonds
c) broker dealers and their agents
d) banks and trust companies
CORRECT ANSWER
B
3
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, Question 8
Which view of the efficient market hypothesis would say that you can make money based
on insider information?
I. weak
II. semistrong
III. strong
IV. correlated
a) I and II
b) I only
c) III only
d) III and IV
CORRECT ANSWER
A
Question 9
Both the _____ and _______ views of efficient market hypothesis believe that unknown
inside information is not reflected in asset prices and could be used to earn a profit; the
______ view of this theory believes that prices in the marketplace reflect only past
information regarding a security; the ________ view believes that prices reflect all past
and current publicly available information regarding a security; the ______ view believes
that past, present, and even nonpublic information is already reflected in a security's
price.
CORRECT ANSWER
weak semistrong weak semistrong strong
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