Greenlight 1 Exam Latest Update 2024
Questions and Correct Answers Rated A+
A revenue bond purchased at a premium, whose cost is reduced in equal
amounts each year, is using: - ANSWER-Straight line amortization
An investor has annuitized a variable annuity and has realized that the
payment he's receiving are falling below market return. If the investor wants
to reallocate a portion of the investment portfolio within the separate
account, which of the following statements is TRUE regarding this
situation? - ANSWER-The investor is permitted to change the allocation of
the investments within the separate account
Super entertainment inc., a publicly traded firm on the NYSE, spins off its
domestic syndication division, creating 1,000,000 new shares. To receive
the new shares, investors must exchange 25% of their old shares.
Investors who receive shares of the new company will: - ANSWER-Be
required to receive a prospectus under the Securities Act of 1933
An option is about to expire will automatically be exercised by the OCC if
no instructions are given and if it is in-the-money by at least: - ANSWER-
One Cent
Which of the following call features would be LEAST desirable for an
investor on a 20 year municipal bond selling at a premium? - ANSWER-A 5
year par call
When comparing bonds rated Aaa to bonds rated Baa, with similar
maturities and coupon rates, the lower-rated bonds will normally have TWO
of what? - ANSWER-Lower Market Prices and Higher Yields
A client currently has $75,000 in cash that he doesn't envision needing for
the next 18 months. He's interested in seeing if he can receive a greater
,return on this cash than the money market fund in which it's currently
invested. What is a suitable choice? - ANSWER-A short-term bond fund
An investor owns Treasury bonds that mature in 20 years. This investor will
be exposed to: - ANSWER-Inflationary risk
An investor purchases 100 shares of XYZ at 60 and also writes an XYZ 65
call at 3. What is the investor's maximum potential loss? - ANSWER-$5700
Which of the following securities would you LEAST likely recommend to an
investor requiring a fixed sum of funds to be received in 10 years? -
ANSWER-CMOs
A municipality issues an original issue bond. If an investor buys the bond
when it is first issued and holds the bond until it matures, what is the tax
treatment on the discount? - ANSWER-The discount is treated as part of
the interest income and is exempt from federal taxes
A member firm is required to send duplicate account statements to FINRA:
- ANSWER-if the customer is an employee of FINRA
A corporation may choose to pay its shareholders with cash dividends or
stock dividends. What is true concerning the tax status of these events? -
ANSWER-The cash dividends are taxable in the year received and the
stock dividends are subject to taxation when the stock is sold
Three bonds have been issued, each with a coupon rate of 6%. Bond A
has a 5 year maturity, Bond B has a 1 year maturity and Bond C has a 6
month maturity. If interest rates change, which bond would be expected to
have the greatest dollar change in price? - ANSWER-Bond A due to
longest maturity
The US Government does NOT guarantee the payment of interest and
principal for which of the following securities? - ANSWER-FHLMC Freddie
Mac securities
, A brokerage firm would like to increase its marketing efforts in option
transactions through the use of certain retail communications. What is NOT
a form of retail communication? - ANSWER-The OCC risk disclosure
statement
RSR Corp has earned $4 per share and has paid a 75 cent dividend per
share. If the stock is selling at $38 a share, what is its price/earnings ratio?
- ANSWER-38/4 = 9.5
A bond with a 4% coupon is priced at a 3.2 basis. If the bond's yield to
maturity decreased by 10 basis points, the yield would be: - ANSWER-
3.1%
A municipal bond backed by an insurance company has gone into default.
The insurance carrier will provide: - ANSWER-Timely payment of principal
and interest
A customer sells short 400 shares and the company declares a 10% stock
dividend. When the customer covers the short position, the customer will
be required to deliver: - ANSWER-440 shares
On Wednesday, Mar 11, a customer purchases 1,000 shares of an OTC
equity security in a cash account through an online brokerage firm. The
transaction will settle: - ANSWER-March 13
Which of the following securities trade without accrued interest? -
ANSWER-Treasure bills
Ms. Brown owns a variable annuity that has a life annuity payout option
with a 20-year period certain. If Ms. Brown dies after 14 years of payments:
- ANSWER-Future payments will continue for 6 years to a named
beneficiary
Questions and Correct Answers Rated A+
A revenue bond purchased at a premium, whose cost is reduced in equal
amounts each year, is using: - ANSWER-Straight line amortization
An investor has annuitized a variable annuity and has realized that the
payment he's receiving are falling below market return. If the investor wants
to reallocate a portion of the investment portfolio within the separate
account, which of the following statements is TRUE regarding this
situation? - ANSWER-The investor is permitted to change the allocation of
the investments within the separate account
Super entertainment inc., a publicly traded firm on the NYSE, spins off its
domestic syndication division, creating 1,000,000 new shares. To receive
the new shares, investors must exchange 25% of their old shares.
Investors who receive shares of the new company will: - ANSWER-Be
required to receive a prospectus under the Securities Act of 1933
An option is about to expire will automatically be exercised by the OCC if
no instructions are given and if it is in-the-money by at least: - ANSWER-
One Cent
Which of the following call features would be LEAST desirable for an
investor on a 20 year municipal bond selling at a premium? - ANSWER-A 5
year par call
When comparing bonds rated Aaa to bonds rated Baa, with similar
maturities and coupon rates, the lower-rated bonds will normally have TWO
of what? - ANSWER-Lower Market Prices and Higher Yields
A client currently has $75,000 in cash that he doesn't envision needing for
the next 18 months. He's interested in seeing if he can receive a greater
,return on this cash than the money market fund in which it's currently
invested. What is a suitable choice? - ANSWER-A short-term bond fund
An investor owns Treasury bonds that mature in 20 years. This investor will
be exposed to: - ANSWER-Inflationary risk
An investor purchases 100 shares of XYZ at 60 and also writes an XYZ 65
call at 3. What is the investor's maximum potential loss? - ANSWER-$5700
Which of the following securities would you LEAST likely recommend to an
investor requiring a fixed sum of funds to be received in 10 years? -
ANSWER-CMOs
A municipality issues an original issue bond. If an investor buys the bond
when it is first issued and holds the bond until it matures, what is the tax
treatment on the discount? - ANSWER-The discount is treated as part of
the interest income and is exempt from federal taxes
A member firm is required to send duplicate account statements to FINRA:
- ANSWER-if the customer is an employee of FINRA
A corporation may choose to pay its shareholders with cash dividends or
stock dividends. What is true concerning the tax status of these events? -
ANSWER-The cash dividends are taxable in the year received and the
stock dividends are subject to taxation when the stock is sold
Three bonds have been issued, each with a coupon rate of 6%. Bond A
has a 5 year maturity, Bond B has a 1 year maturity and Bond C has a 6
month maturity. If interest rates change, which bond would be expected to
have the greatest dollar change in price? - ANSWER-Bond A due to
longest maturity
The US Government does NOT guarantee the payment of interest and
principal for which of the following securities? - ANSWER-FHLMC Freddie
Mac securities
, A brokerage firm would like to increase its marketing efforts in option
transactions through the use of certain retail communications. What is NOT
a form of retail communication? - ANSWER-The OCC risk disclosure
statement
RSR Corp has earned $4 per share and has paid a 75 cent dividend per
share. If the stock is selling at $38 a share, what is its price/earnings ratio?
- ANSWER-38/4 = 9.5
A bond with a 4% coupon is priced at a 3.2 basis. If the bond's yield to
maturity decreased by 10 basis points, the yield would be: - ANSWER-
3.1%
A municipal bond backed by an insurance company has gone into default.
The insurance carrier will provide: - ANSWER-Timely payment of principal
and interest
A customer sells short 400 shares and the company declares a 10% stock
dividend. When the customer covers the short position, the customer will
be required to deliver: - ANSWER-440 shares
On Wednesday, Mar 11, a customer purchases 1,000 shares of an OTC
equity security in a cash account through an online brokerage firm. The
transaction will settle: - ANSWER-March 13
Which of the following securities trade without accrued interest? -
ANSWER-Treasure bills
Ms. Brown owns a variable annuity that has a life annuity payout option
with a 20-year period certain. If Ms. Brown dies after 14 years of payments:
- ANSWER-Future payments will continue for 6 years to a named
beneficiary
