FINRA – Premium VCE Dumps

QUESTION 24
Which of the following statements best describes a characteristic of 529 savings plan accounts?

There are no contribution limits to the account.

The number of contributors to the account is limited.

Using funds for undergraduate or graduate studies is permissible.

Earnings are taxed to the donor at the time of a qualified withdrawal.

QUESTION 25
Company XYZ is a U.S.-based provider of domestic utility services. XYZ’s noncallable bonds pay a coupon rate of 5% and are currently yielding 9%. Market interest rates are currently 5.5%. An investor who purchases XYZ bonds is most exposed to which of the following risks?

Credit risk

Political risk

Currency risk

Prepayment risk

QUESTION 26
A market maker quotes the market on an NMS equity security as 39.05 – 39.15 [5×10]. Which of the following orders is the market maker required to fill?

A buy order for 2,000 shares at $39.15

A buy order for 1,000 shares at $39.10

A sell stop order for 500 shares at $39.00

A sell order for 300 shares at $39.05

QUESTION 27
Which of the following transactions is most profitable if executed prior to a significant rise in a company’s stock price?

Buying a put option

Buying a call option

Selling a put option

Selling a call option

QUESTION 28
A customer holds 1,000 shares of Company XYZ and wants to sell covered calls against this position. What is the maximum number of contracts that the customer could sell and still remain covered?

5 contracts

10 contracts

100 contracts

1,000 contracts

QUESTION 29
Under SEC Regulation D, which of the following parties is considered an accredited investor?

A person whose joint income with their spouse exceeds $200,000 in each of the two most recent years and who has a reasonable expectation of reaching the same income level in the current year.

A person whose net worth, excluding the net equity in their primary residence, exceeds $500,000 at the time of purchase.

A person whose net worth, excluding the net equity in their primary residence, exceeds $1 million at the time of purchase.

A charitable organization, partnership, or corporation whose assets exceed $2.5 million.

QUESTION 30
A registered representative (RR) at a member firm is the subject of a statutory disqualification. Which of the following statements is true?

The RR is prohibited from soliciting business but is permitted to accept unsolicited orders.

The RR is prohibited from any association or employment with a member firm unless he obtains a waiver.

The RR is prohibited from employment by a member firm in any registered capacity but is permitted to be employed in an unregistered capacity.

A statutory disqualification, although reportable to CRD, does not affect employment in the securities industry.

QUESTION 31
Under which of the following circumstances, if any, is a registered representative (RR) permitted to share in the profits and losses of security interests that the RR has purchased jointly with a customer?

Only when the customer is an accredited investor

Only if the RR’s firm is also a participant in the sharing arrangement

When the profits and losses are proportionate to the amount contributed by the RR

Under no circumstances

QUESTION 32
A grandfather establishes a Uniform Transfers to Minors Act (UTMA) custodial account for his grandson and appoints an attorney as custodian. Which of the following individuals owns the account?

Attorney

Grandfather

Grandson

Grandson’s parent

QUESTION 33
A broker-dealer (BD) is underwriting an initial public offering (IPO). According to industry rules, which of the following customers is eligible to participate in the IPO?

An unregistered sales assistant employed by the BD

The BD’s branch office manager’s unemployed spouse

A customer of the BD who is the president of a local bank

The chief financial officer of a fast-food chain, whose brother is a registered representative employed by the BD

QUESTION 34
A real estate investment trust (REIT) is required to invest what percentage of total assets in real-estate-related assets to maintain favorable tax treatment?

At least 50% of total assets

At least 75% of total assets

At least 90% of total assets

100% of assets

QUESTION 35
Which of the following statements is true with regard to SIPC and FDIC?

SIPC coverage is only for securities, and FDIC coverage is only for cash.

SIPC protects brokerage accounts, and FDIC protects bank deposits.

Money market mutual funds are covered by the FDIC and are not covered by SIPC.

Securities held at broker-dealers are covered by the FDIC and are not covered by SIPC.

QUESTION 36
The Options Clearing Corporation (OCC) is a registered clearing agency for which of the following products?

Listed stocks

Over-the-counter bonds

Exchange-traded funds (ETFs)

Long-term Equity Anticipation Securities (LEAPS)

QUESTION 37
A registered representative must complete which of the following activities when entering a discretionary trade?

Only exercise discretion over market orders

Indicate that discretion was exercised on the order ticket to be identified for supervisory review

Obtain authorization from the customer before each discretionary order is entered

Receive instructions from the customer as to the price at which to buy or sell a security

QUESTION 38
When the index level and strike price of a listed index option are the same, the option is:

In the money.

At the money.

Out of the money.

Trading at intrinsic value only.

QUESTION 39
How long are unused funds permitted to remain in a Coverdell education savings account?

All funds must be distributed when the beneficiary’s age reaches 21 years old.

All funds must be distributed when the beneficiary’s age reaches 30 years old.

All funds must be distributed when the beneficiary’s age reaches 59 ½ years old.

There is no age limit preventing funds from remaining in a beneficiary’s account.

QUESTION 40
An investor buys 100 shares of a stock at $50.00 per share. The company declares a 10% stock dividend.
What will the investor’s cost basis per share be following the payment of the dividend?

$45.00

$45.45

$50.00

$50.50

QUESTION 41
Which of the following is considered nonpublic information?

Customer’s name

Customer’s address

Customer’s net worth

Customer’s telephone number

QUESTION 42
How does an individual acquire restricted stock?

By participating in an SEC Regulation D offering

By participating in an initial public offering (IPO)

By exercising publicly traded warrants

By exercising an option for exchange-traded calls

QUESTION 43
A bond with a par value of $1,000 that is backed by the taxing power of a local government is known as:

A revenue bond

A Treasury bond

A corporate bond

A general obligation (GO) bond

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