Jamie has inherited 500 shares of an investment company. She calls her broker to
redeem the shares and is informed that the kind of investment company she owns
makes no provision for future purchases or redemptions. What kind of investment
company does she own?
A. An open-end fund
B. A closed-end fund
C. A unit investment trust
D. A face-amount certificate company
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, B. A closed-end fund
A closed-end fund makes no provision for future purchases or redemptions
from the issuing fund.
A type of bond in which the amount of interest paid to the investor may change is
referred to as a:
A. Convertible bond
B. Variable rate bond
C. Zero-coupon bond
D. Callable bond
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B. Variable rate bond
Which of the following choices has the LEAST amount of interest-rate risk?
A. A Treasury bond maturing in 30 years
B. A newly-issued GNMA security that's backed by 15-year mortgages
C. A Treasury STRIP maturing in eight years
D. A BB-rated corporate debenture maturing in two years
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, D. A BB-rated corporate debenture maturing in two years
Interest-rate risk is primarily related to the maturity of a bond. The longer
the bond's maturity, the more interest-rate risk it has. In this case, the two-
year debenture has the least interest-rate risk because it has the shortest
maturity. A bond's rating influences its credit risk, not its interest-rate risk.
Which of the following statements is TRUE regarding contributions to a 401(k) plan?
A. Contributions are in after-tax dollars.
B. Employee participants should be aware of the risk of investing too much in their
employer's stock.
C. The employer determines the investments into which the contributions are
allocated.
D. Contributions of an unlimited amount can be made by employees.
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B. Employee participants should be aware of the risk of investing too much
in their employer's stock.
A previously registered person was convicted of a felony 14 years ago and has served
out his sentence in federal prison. If he's now seeking employment as a registered
representative, he should be informed that:
A. He may be hired as a registered representative
B. He may not be hired as a registered representative
C. He may be hired to provide investment advice to customers, but will not be
permitted to receive compensation based on these transactions
D. He may be hired to provide financial advice, but will not be permitted to become
registered
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, A. He may be hired as a registered representative
A convicted felon is barred from the securities business for 10 years from
the time of conviction. This type of ban is referred to as a statutory
disqualification. Since the conviction was more than 10 years ago, the
person may be hired as a registered representative.
State securities laws are also referred to as:
A. Self-regulatory rules
B. The Investment Company Act of 1940
C. The Blue Sky laws
D. The Securities Exchange Act of 1934
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C. The Blue Sky laws
All of the following characteristics would be associated with a growth company,
EXCEPT that it has a:
A. High price/earnings ratio
B. High dividend payout ratio
C. High amount of research and development costs
D. Wide trading range for the price of its stock
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B. High dividend payout ratio
redeem the shares and is informed that the kind of investment company she owns
makes no provision for future purchases or redemptions. What kind of investment
company does she own?
A. An open-end fund
B. A closed-end fund
C. A unit investment trust
D. A face-amount certificate company
Give this one a try later!
, B. A closed-end fund
A closed-end fund makes no provision for future purchases or redemptions
from the issuing fund.
A type of bond in which the amount of interest paid to the investor may change is
referred to as a:
A. Convertible bond
B. Variable rate bond
C. Zero-coupon bond
D. Callable bond
Give this one a try later!
B. Variable rate bond
Which of the following choices has the LEAST amount of interest-rate risk?
A. A Treasury bond maturing in 30 years
B. A newly-issued GNMA security that's backed by 15-year mortgages
C. A Treasury STRIP maturing in eight years
D. A BB-rated corporate debenture maturing in two years
Give this one a try later!
, D. A BB-rated corporate debenture maturing in two years
Interest-rate risk is primarily related to the maturity of a bond. The longer
the bond's maturity, the more interest-rate risk it has. In this case, the two-
year debenture has the least interest-rate risk because it has the shortest
maturity. A bond's rating influences its credit risk, not its interest-rate risk.
Which of the following statements is TRUE regarding contributions to a 401(k) plan?
A. Contributions are in after-tax dollars.
B. Employee participants should be aware of the risk of investing too much in their
employer's stock.
C. The employer determines the investments into which the contributions are
allocated.
D. Contributions of an unlimited amount can be made by employees.
Give this one a try later!
B. Employee participants should be aware of the risk of investing too much
in their employer's stock.
A previously registered person was convicted of a felony 14 years ago and has served
out his sentence in federal prison. If he's now seeking employment as a registered
representative, he should be informed that:
A. He may be hired as a registered representative
B. He may not be hired as a registered representative
C. He may be hired to provide investment advice to customers, but will not be
permitted to receive compensation based on these transactions
D. He may be hired to provide financial advice, but will not be permitted to become
registered
Give this one a try later!
, A. He may be hired as a registered representative
A convicted felon is barred from the securities business for 10 years from
the time of conviction. This type of ban is referred to as a statutory
disqualification. Since the conviction was more than 10 years ago, the
person may be hired as a registered representative.
State securities laws are also referred to as:
A. Self-regulatory rules
B. The Investment Company Act of 1940
C. The Blue Sky laws
D. The Securities Exchange Act of 1934
Give this one a try later!
C. The Blue Sky laws
All of the following characteristics would be associated with a growth company,
EXCEPT that it has a:
A. High price/earnings ratio
B. High dividend payout ratio
C. High amount of research and development costs
D. Wide trading range for the price of its stock
Give this one a try later!
B. High dividend payout ratio
