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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Obtains and Verifies Customers’ Purchase and Sales Instructions; Processes, Completes and Confirms Transactions | 11% | - Order types and execution procedures - Regulatory requirements for transaction processing - Trade settlement and confirmation rules |
| Topic 2: Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records | 73% | - Direct participation programs - Recordkeeping and regulatory reporting - Debt securities and government obligations - Municipal securities - Options and derivative products - Investment companies, ETFs, and variable annuities - Equity securities - Margin accounts and taxation |
| Topic 3: Seeks Business for the Broker-Dealer from Customers and Potential Customers | 7% | - Customer communication and solicitation rules - Product-specific disclosures and regulatory requirements - Standards for advertising and public communications |
| Topic 4: Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives | 9% | - Financial profile, risk tolerance, and investment objectives - Suitability rules and regulatory compliance - Account types and documentation requirements |
1. The maximum contribution an employer may make to a SEP-IRA is:
A) $4,000
B) 100% of employee compensation
C) 25% of employee compensation
D) $5,000
2. The Bubba Corporation has 900,000 of common outstanding and holds 100,000 shares as treasury stock.
At the end of the third quarter $450,000 is distributed as a dividend on the common. How much is the
dividend per share?
A) $2.00
B) $2.22
C) $0.50
D) $0.45
3. An investor purchasing a corporate bond regular way will have to pay the contracted price plus accrued
interest:
A) up to and including the trade date
B) up to but not including the settlement date
C) up to but including the settlement date
D) up to but not including the trade date
4. A revenue bond is issued by a state agency. The state legislature is granted authority to apportion money
to support the debt services if necessary, but is not legally obligated to do so. What type of bond is this?
A) moral obligation
B) double-barreled
C) Series 8
D) limited tax
5. Who obtains and pays the municipal bond attorney rendering a legal opinion about the validity of the bond
issue?
A) the issuing municipality
B) the municipality's financial adviser
C) the purchaser of the bonds
D) the underwriter
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: B | Question # 4 Answer: A | Question # 5 Answer: A |
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