Series 50 Practice Exam Questions and
answers with solutions
Sinking fund redemption - ANSWER When money is routinely put into an escrow account to
redeem the bonds before maturity
What is the responsibility of the UW not the MA - ANSWER Submitting the FOS to EMMA
Net pension liability - ANSWER Used for a defined benefit plan
Total liability - plan net position
(how much they owe in the future) - (net assets of the plan)
Hedging strategy vs. speculative strategy - ANSWER Hedging strategy protects against interest
rate risk
Speculative strategy is used to make a profit
3 types of funds municipalities include in their financial statements - ANSWER Fiduciary
(pensions)
Proprietary (utility companies)
Governmental (debt service and general funds)
Flat price vs. dirty price - ANSWER Flat price: without accrued interest
Dirty price: with accrued interest
Bonds are quoted at a flat price but trade at a dirty price (usually)
, Marketability of GO bonds vs. revenue - ANSWER GO bonds are more marketable than revenue
Are high or low bond denomination more marketable - ANSWER Higher denominations are
more marketable
Securities Act of 1933 - ANSWER 1. disclosure of all relevant information pertaining to security
2. prohibit marketing fraud
Muni bonds are exempt from the registration rule set by the act, but are subject to anti fraud
rules
Market-to-market value of swaps - ANSWER Market value of the swap given current interest
rates
VR-FR
negative MTM: lower variable rate
positive MTM: high variable rate
A mill - ANSWER How ad valorem taxes are expressed
1/1000th of a dollar or .1%
In the case of an advance refunding, how long must the records of the refunded bond be kept -
ANSWER Until 3 years after the refundinggg bond is redeemed
answers with solutions
Sinking fund redemption - ANSWER When money is routinely put into an escrow account to
redeem the bonds before maturity
What is the responsibility of the UW not the MA - ANSWER Submitting the FOS to EMMA
Net pension liability - ANSWER Used for a defined benefit plan
Total liability - plan net position
(how much they owe in the future) - (net assets of the plan)
Hedging strategy vs. speculative strategy - ANSWER Hedging strategy protects against interest
rate risk
Speculative strategy is used to make a profit
3 types of funds municipalities include in their financial statements - ANSWER Fiduciary
(pensions)
Proprietary (utility companies)
Governmental (debt service and general funds)
Flat price vs. dirty price - ANSWER Flat price: without accrued interest
Dirty price: with accrued interest
Bonds are quoted at a flat price but trade at a dirty price (usually)
, Marketability of GO bonds vs. revenue - ANSWER GO bonds are more marketable than revenue
Are high or low bond denomination more marketable - ANSWER Higher denominations are
more marketable
Securities Act of 1933 - ANSWER 1. disclosure of all relevant information pertaining to security
2. prohibit marketing fraud
Muni bonds are exempt from the registration rule set by the act, but are subject to anti fraud
rules
Market-to-market value of swaps - ANSWER Market value of the swap given current interest
rates
VR-FR
negative MTM: lower variable rate
positive MTM: high variable rate
A mill - ANSWER How ad valorem taxes are expressed
1/1000th of a dollar or .1%
In the case of an advance refunding, how long must the records of the refunded bond be kept -
ANSWER Until 3 years after the refundinggg bond is redeemed
