Securites Essentials Exam
3|Questions and Answers Verified
100% Correct
If a registered representative has just observed her second anniversary in the industry
and did the required regulatory element CE, the next time she will be required to sit
for the regulatory element is - ANSWER three years from now.
A broker-dealer is confronted with margin deposit due but not yet received. The BD can
choose to take no action, neither selling out the securities nor requesting an extension,
if the amount due is less than - ANSWER $1,000
Associated persons who wish to enter into a private securities transaction for which
they will receive no compensation must - ANSWER provide prior written notice to their
employer.
For an additional issue, if the security is non-Nasdaq the delivery requirement is
- ANSWER 40 days.
An associated person of a FINRA member firm would NOT be considered a municipal
finance professional (MFP) if involved solely in - ANSWER Municipal securities sales
to customers
Direct participation real estate programs come in 3 types: - ANSWER raw land,
new construction, existing properties. Income is a type of oil and gas program.
,DPPs are not taxed directly as a corporation would be. Instead, the income or losses from
the business are passed directly through to the owners of the partnership. These are the
investors who are - ANSWER then individually responsible for any tax liability.
The signing of the loan consent agreement allowing one's securities to be loaned
to others for the purpose of short sales is - ANSWER optional
If investors have income listed as their investment objective, they would NOT hold which
of the following securities in their portfolio? - ANSWER Income bonds. Also known as
adjustment bonds, income bonds pay interest only if the issuer has enough earnings to do
so. They are often issued by companies coming out of bankruptcy. As a result, the interest
payments providing the income to meet the objective are uncertain.
Bankruptcy is a general term for court procedures available to - ANSWER both
individuals and businesses.
Real estate investment trusts (REITs) pay dividends and pass gains through to
investors BUT NOT - ANSWER LOSSES
New account forms filled out when the customer account was opened and stock records
showing all the securities held by the firm and where they are held must be kept for -
ANSWER 6 years
Minute books showing the minutes of directors' meetings are lifetime
records. Advertising need only be kept for - ANSWER 3 years
Short sales involve selling shares not yet - ANSWER owned.
Maximum loss for a short call is - ANSWER unlimited. This could occur because the
underlying stock can rise to some unlimited number.
, For bonds trading at a premium (101), the nominal yield (or coupon) is higher or lower
than the basis (YTM)? - ANSWER higher. For bonds at a premium, yields from lowest
to highest are yield to call, yield to maturity, current yield, and nominal yield.
At expiration for all options (calls and puts), buyers want the contracts to have - ANSWER
intrinsic value—therefore, be in the money. Writers, on the other hand, want the
contracts to be either at or out of the money and therefore have no intrinsic value.
Like Treasury bonds (T-bonds), Treasury notes (T-notes) have interest stated as a -
ANSWER percentage of par value. Example: Par value $1,000, with 8% interest,
equals $80 interest per year (0.08 × $1,000 = $80).
True or false: Warrants are marginable securities - ANSWER True
True or false: Rights are marginable - ANSWER False
A corporation has issued a single bond having successive maturity dates set from 2020
through 2030. This is known as what type of bond? - ANSWER serial (NO SUCH THING AS
SERIES)
T-bills are purchased - ANSWER at a discount
T- bonds and T-note are purchased - ANSWER as a percentage of par.
Treasury bills are short-term debt obligations of the U.S. government issued how
often? - ANSWER weekly
3|Questions and Answers Verified
100% Correct
If a registered representative has just observed her second anniversary in the industry
and did the required regulatory element CE, the next time she will be required to sit
for the regulatory element is - ANSWER three years from now.
A broker-dealer is confronted with margin deposit due but not yet received. The BD can
choose to take no action, neither selling out the securities nor requesting an extension,
if the amount due is less than - ANSWER $1,000
Associated persons who wish to enter into a private securities transaction for which
they will receive no compensation must - ANSWER provide prior written notice to their
employer.
For an additional issue, if the security is non-Nasdaq the delivery requirement is
- ANSWER 40 days.
An associated person of a FINRA member firm would NOT be considered a municipal
finance professional (MFP) if involved solely in - ANSWER Municipal securities sales
to customers
Direct participation real estate programs come in 3 types: - ANSWER raw land,
new construction, existing properties. Income is a type of oil and gas program.
,DPPs are not taxed directly as a corporation would be. Instead, the income or losses from
the business are passed directly through to the owners of the partnership. These are the
investors who are - ANSWER then individually responsible for any tax liability.
The signing of the loan consent agreement allowing one's securities to be loaned
to others for the purpose of short sales is - ANSWER optional
If investors have income listed as their investment objective, they would NOT hold which
of the following securities in their portfolio? - ANSWER Income bonds. Also known as
adjustment bonds, income bonds pay interest only if the issuer has enough earnings to do
so. They are often issued by companies coming out of bankruptcy. As a result, the interest
payments providing the income to meet the objective are uncertain.
Bankruptcy is a general term for court procedures available to - ANSWER both
individuals and businesses.
Real estate investment trusts (REITs) pay dividends and pass gains through to
investors BUT NOT - ANSWER LOSSES
New account forms filled out when the customer account was opened and stock records
showing all the securities held by the firm and where they are held must be kept for -
ANSWER 6 years
Minute books showing the minutes of directors' meetings are lifetime
records. Advertising need only be kept for - ANSWER 3 years
Short sales involve selling shares not yet - ANSWER owned.
Maximum loss for a short call is - ANSWER unlimited. This could occur because the
underlying stock can rise to some unlimited number.
, For bonds trading at a premium (101), the nominal yield (or coupon) is higher or lower
than the basis (YTM)? - ANSWER higher. For bonds at a premium, yields from lowest
to highest are yield to call, yield to maturity, current yield, and nominal yield.
At expiration for all options (calls and puts), buyers want the contracts to have - ANSWER
intrinsic value—therefore, be in the money. Writers, on the other hand, want the
contracts to be either at or out of the money and therefore have no intrinsic value.
Like Treasury bonds (T-bonds), Treasury notes (T-notes) have interest stated as a -
ANSWER percentage of par value. Example: Par value $1,000, with 8% interest,
equals $80 interest per year (0.08 × $1,000 = $80).
True or false: Warrants are marginable securities - ANSWER True
True or false: Rights are marginable - ANSWER False
A corporation has issued a single bond having successive maturity dates set from 2020
through 2030. This is known as what type of bond? - ANSWER serial (NO SUCH THING AS
SERIES)
T-bills are purchased - ANSWER at a discount
T- bonds and T-note are purchased - ANSWER as a percentage of par.
Treasury bills are short-term debt obligations of the U.S. government issued how
often? - ANSWER weekly
