Under what form of ownership may a husband and wife ensure that their property is not able to be attached by the creditors of either spouse?
A. Tenants in common
B. A qualified domestic partnership order
C. Tenancy by the entirety
D. Joint tenants with right of survivorship correct answers C....
Series 65 || Already Passed.
Under what form of ownership may a husband and wife ensure that their property is not able to
be attached by the creditors of either spouse?
A. Tenants in common
B. A qualified domestic partnership order
C. Tenancy by the entirety
D. Joint tenants with right of survivorship correct answers C. Tenancy by the entirety
Tenancy by the entirety, which is only available to married couples, allows spouses to own
property as a single legal entity. With this form of ownership, a creditor of one spouse is unable
to make a claim to the account's assets. However, if the creditor has a claim against both spouses,
it may make a claim to the assets.
Which bonds would have the greatest sensitivity to changes in interest rates?
I. Bonds with a long duration
II. Bonds with a short duration
III. Bonds with a high coupon
IV. Bonds with a low coupon?
A. I and III
B. I and IV
C. II and III
D. II and IV correct answers B. I and IV
Duration is the measure of a bond's pricing sensitivity to small changes in interest rates measured
in years. The longer the bond's duration, the greater its pricing sensitivity. Bonds with low
coupons will be more sensitive to interest-rate changes than bonds with high coupons because a
change in rates in the market will be a greater percentage change for a low-coupon bond than a
high-coupon bond.
According to Reg. T, if a client fails to pay for securities by the fifth business day following the
trade date, the client's account will be:
A. Closed
B. Restricted for 90 days
C. Suspended for 90 days
D. Frozen for 90 days correct answers D. Frozen for 90 days
According to Reg. T, if a client fails to make payment for securities being purchased by the fifth
business day following the trade date, and an extension has not been granted by FINRA, the
client's account will be frozen for 90 days. During the 90-day frozen period, trading may occur in
the client's account; however, any purchases that are made during the frozen period must be fully
,paid for in advance. In other words, no credit (margin) may be extended to the customer for 90
days.
During periods of deflation, the FRB will likely:
A. Purchase securities in the open market
B. Sell securities in the open market
C. Encourage a rise in interest rates
D. Issue new securities correct answers A. Purchase securities in the open market
In an effort to stimulate the economy, the FRB will attempt to move into a period of easy money.
Easing money (making it available) may be accomplished by purchasing securities in the open
market. On the other hand, selling securities, issuing new securities, or encouraging higher
interest rates will have an opposite effect.
Broker-dealers are required to keep a copy of all orders, EXCEPT:
A. Not-held orders
B. Cancelled orders
C. Orders to subscribe to a rights offering
D. Market orders correct answers C. Orders to subscribe to a rights offering
A broker-dealer is required to maintain a copy of all orders, except those that subscribe to a
rights offering, as they are sent directly to the issuer by the shareholder.
Under the Uniform Prudent Investor Act, which choice BEST explains the level of care a trustee
must exercise when managing a trust?
A. Trustees are not required to comply with the Uniform Prudent Investor Act since it only
applies to investment advisers
B. The objectives of the trust as a whole should be taken into consideration when making
investment decisions
C. Investment and management responsibilities may be outsourced to an individual who is
licensed as a CPA
D. Trustees are obligated to adhere to the objectives of the beneficiaries with no consideration
given to the trust's objectives correct answers B. The objectives of the trust as a whole should be
taken into consideration when making investment decisions.
Since they are considered a fiduciary, trustees must adhere to the provisions stated in the
Uniform Prudent Investor Act. The trustee must not only consider the investment objectives of
the entire trust, he must also pay attention to the beneficiaries' total assets.
In determining the loan value of marginable securities, the agent should:
A. Use the 20% Rule under the Uniform Securities Act
B. Multiply the market value by 50%
, C. Refer to ADV Part 2
D. Use the percentage allowed by the state Administrator correct answers B. Multiply the market
value by 50%
The loan value of most marginable securities is determined by multiplying the market value of
the securities by Regulation T of the Federal Reserve Board, which is 50%. There is no provision
in the Uniform Securities Act that discusses the margin requirement on securities. The
percentage is set forth by either the FRB or by certain self-regulatory organizations (SROs) such
as the NYSE or FINRA.
An investor who is in a high federal tax bracket and also subject to state and local taxes will
benefit the MOST by purchasing:
A. A state general obligation bond
B. A transportation revenue municipal bond
C. A zero-coupon Treasury STRIPS
D. A Commonwealth of Puerto Rico Water and Sewer bond correct answers D. A
Commonwealth of Puerto Rico Water and Sewer bond
The interest on bonds that are issued by territories and possessions of the United States is triple-
tax-exempt (i.e., it is not subject to federal, state, and local income taxes). For that reason, these
bonds are attractive investments for investors in high tax brackets. General obligation bonds and
revenue bonds are the two types of municipal bonds and their interest is exempt from federal tax,
but may still be subject to state and local tax. Interest on Treasury STRIPS is exempt from state
and local tax, but still subject to federal income tax.
A corporate bond is purchased at its par value of $1,000 and later sold at a discount. This would
be indicative of which of the following risks?
I. Opportunity risk
II. Credit risk
III. Currency risk
IV. Interest-rate risk
A. I only
B. III only
C. I and III only
D. II and IV only correct answers D. II and IV only
The most likely the reason for the bond's price decline is that interest rates have risen. The risk of
interest rates moving against a bond investor is referred to as interest-rate risk. Another possible
explanation for the bond losing value is that its credit rating fell (credit risk).
For a new issuance of securities, when is a prospectus required to be delivered to purchasers?
A. For primary market transactions only
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