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Normally, the largest expense incurred by an open-end investment company is the:

A. Sales charge reallowed to the broker-dealers
B. Custodial fee
C. Investment advisory fee
D. Accountant's fee

C. Management (investment advisory) fees are normally the largest expense incurred by an open-end investment company (mutual fund).

An advantage of a Coverdell account over a 529 plan is:
A. Higher annual contributions
B. Stronger tax incentives
C. More educational options
D. No income limit on contributors

C. The maximum annual contribution to a Coverdell IRA is $2,000. Contributions to a 529 plan are substantially higher. Although there is no annual limit on a 529 plan, contributions exceeding the annual gift limits of $14,000 per year may be subject to the payment of gift taxes. Lump-sum contributions of up to $70,000 over a five-year period are permitted by single individuals and up to $140,000 if the contribution is made from joint property. Qualified distributions from the account are tax-free in both cases. Funds in the Coverdell may be used for elementary school as well as for higher education, whereas distributions from a 529 plan may be used only for higher education. Income limits apply to Coverdell contributors, but do not apply to 529 plans.

A registered representative sells shares of a mutual fund to a customer at a dollar amount of $49,500. The RR does not disclose that a reduced sales charge is available at amounts of $50,000 and above. This practice is a(n):

A. Acceptable practice known as a breakpoint sale
B. Acceptable practice known as front-running
C. Prohibited practice known as front-running
D. Prohibited practice known as a breakpoint sale

D. The practice described in this situation is a breakpoint sale and is a prohibited business practice under FINRA rules. It is defined as selling shares of an investment company just below the quantity where a customer would receive a quantity discount (breakpoint). For example, suppose the sales charge is 5% on dollar amounts invested below $50,000 and 3% on amounts at or above $50,000. If the customer in the question had invested an additional $500, he would have paid a lower sales charge.

A client redeems shares of a mutual fund. According to current regulations, a check must be sent within how many days of submitting a redemption notice?

A. 5 days
B. 7 days
C. 10 days
D. 15 days

B. Federal regulation requires that an individual receive payment for the redemption of a mutual fund within seven days.

Which of the following choices is a type of retirement plan associated with individuals who work for a publicly traded company?

A. A 457 plan
B. A 403(b) plan
C. A 401(k) plan
D. A 529 plan

C. A 401(k) plan is a tax-advantaged retirement account established by corporations, both private and publicly traded. A 457 plan is a tax-advantaged retirement plan that may be established by a governmental body (a municipality) or nongovernmental (nonprofit) employers. 403(b) plans are established by certain nonprofit organizations, such as religious organizations or public schools. A 529 plan is a tax-advantaged savings plan used by individuals to fund higher education needs.

An investor might take advantage of a Section 1035 exchange if:

A. The new contract carries a new or longer surrender period
B. The enhanced features do not apply to her
C. Her investment objectives have changed and she is unable to obtain new benefits by switching to another subaccount in the same contract
D. The total cost of the exchange outweighs the benefits of the exchange

C. In order for the 1035 exchange to avoid scrutiny, the customer must be able to benefit from at least some of the features received on the new contract. Should the customer lose benefits, incur additional charges, or be subject to a longer surrender period, the 1035 exchange is likely to be viewed as unsuitable.

Which of the following securities is LEAST appropriate for an IRA account?

A. Covered call writing
B. Convertible bonds
C. Exchange-traded funds (ETFs)
D. Municipal bonds

D. IRA's are tax-advantaged retirement accounts. Municipal bonds are the least appropriate because, when placed in an IRA, the interest becomes taxable at retirement. The main reason that investors buy municipal bonds is to take advantage of tax-exempt interest If that characteristic is removed, municipal bonds are not as attractive.

The BG mutual fund has a NAV of $11.72 and a maximum offering price of $12.67. What is the maximum sales charge for this fund?

A. 7.5%
B. 8.10%
C. 8.50%
D. 9%

A. The maximum sales charge for the fund is calculated by dividing the difference between the offering price and the NAV ($12.67 - $11.72 = $0.95) by the offering price ($0.95 divided by $12.67 equals 7 1/2 %).

The separate account of the variable life policy that Tom Jones bought is performing poorly. Does this have any influence on his death benefit?

A. No, the death benefit is fixed over the life of the contract
B. Yes, but it could never drop below the highest death benefit attained during the time that the contract began building cash value
C. Yes, but it could never drop below the fixed minimum
D. No, the cash value can only increase over the life of the contract

C. If the performance of the separate account of a variable life insurance policy is less than the assumed interest rate (AIR), the death benefit will decline. However, the death benefit may never drop below the face value of the policy.

Over the last 20 years, Grant Rock, age 66, has invested $200,000 in a tax-qualified annuity sponsored by his employer, Tombstone Enterprises. The account is currently worth $800,000. He decides to annuitize the contract and begin drawing down the contract balance. In the first year he has received $50,000. How will these distributions be taxed?

A. 100% is taxable as ordinary income
B. 100% is tax-free since Grant is above age 59 1/2
C. Part of the distribution will be taxable at long-term capital gains rates and the balance will be viewed as a return of capital
D. Part of the distribution will be taxable at ordinary income rates and the balance will be viewed as a return of capital

A. This question discusses a qualified annuity, also known as a tax-sheltered or tax-qualified annuity. A qualified annuity is funded with pretax contributions from the employee's paycheck. This means the money that goes into the contract has never been taxed. Earnings grow tax-deferred. Upon distribution, both the earnings and the original contribution are taxed at ordinary income rates. A different way of saying this is the annuity has a zero cost basis; therefore, 100% of distributed funds are taxable as income. Annuity distributions never generate long-term capital gains.

Which TWO of the following statements are TRUE regarding the contract holder of a variable annuity?

I. The investor buys into the variable annuity at current market value plus commission
II. The investor buys into the variable annuity at net asset value plus a sales charge
III. The investor bears all the associated investment risk
IV. The investor is provided with the same dollar payments at regular intervals for the contract term

A. I & III
B. I & IV
D. II & IV

C. Variable annuities are purchased by investors at the net asset value plus a sales charges and, during the payout period, provide the annuitant with variable dollar payments at regular intervals for the contract term. Since the dollar amount of the payout varies according to the fluctuating value of the separate account, the investor bears the investment risk of a variable annuity. Closed-end investment company shares are purchased by the investor at current market value plus a commission.

Which of the following statements is NOT TRUE about a Keogh plan?
A. It may only be opened by those with self-employed income
B. It is a retirement plan where earnings in the account are tax-deferred
C. It is a nonqualified plan that is exempt from ERISA standards
D. Contributions made to the plan are tax-deductible

C. A Keogh plan is a qualified retirement plan for a self-employed individual and some of his employees. It is set up according to the standards established by ERISA. Contributions to the plan and earnings in the plan are not subject to tax until they are withdrawn. Keoghs are not tax-free. The tax is deferred.

In reviewing prices for a mutual fund, an investor notices that the Beacon Fund has two listings, one for Class A shares and the other for Class B shares. The distinction between the two classes of shares is most likely that:

A. Class A shares are oriented toward short-term trading, while Class B shares have a long-term perspective
B. Class A shares should be purchased by income-oriented investors, while Class B shares are for those seeking capital appreciation
C. Class A shares can be purchased directly from the fund, while Class B shares are offered through broker-dealers
D. Class A shares have a front-end sales charge, while Class B shares have a contingent deferred sales charge

D. The difference between Class A and Class B shares is normally that the A shares have a front-end sales charge while the B shares have a contingent deferred sales charge (CDSC). A CDSC is deducted only when the investor redeems shares. Generally, if the investor holds the B shares for a sufficient period, there is no sales charge deducted upon redemption.

Which of the following statements about a closed-end investment company is TRUE?
A. It is continuously issuing new shares
B. It may be redeemed by the issuing investment company
C. It is traded in the open market at its current market price
D. It may only issue common stock

C. The only true statement regarding a closed-end investment company is that it is traded in the open market at its current market price. All of the other statements apply to an open-end investment company.

An increase in which of the following choices would cause an increase in the expense ratio for an investment company?
A. Redemptions
B. Management fees
D. Shareholders

B. The expense ratio depends on the fees charged against the net assets of the fund. The only fee listed in this question is the management fee.

Who is permitted to participate in a tax-sheltered annuity established under Internal Revenue Code Section 403(b)?
A. A student of a school district that has an established plan
B. Only self-employed individuals
C. Any employee of a corporation who meets the eligibility standards
D. An employee of a nonprofit organization that has an established plan

D. Tax-sheltered annuities are funded with pretax dollars and represent an immediate deduction to the investor. They are made available to employees of public school systems (not students) and to employees of certain nonprofit organizations under IRS Code 501(c)(3).

Which TWO of the following choices are advantages of trading exchange-traded funds (ETFs)?
They may be purchased on margin
Investors can receive breakpoints
There is no fee to liquidate shares
They may be sold short
A. I and III
B. I and IV
C. II and III
D. III and IV

B. Exchange-traded funds (ETFs) represent a basket of securities. They are structured to represent an index of securities such as the Nasdaq 100 or the Dow Jones Industrial Average. Their shares are purchased and sold on an exchange; therefore, they may be purchased on margin and sold short. Mutual funds may not be purchased on margin or sold short since they are sold under prospectus and not on an exchange. Investors pay a commission whenever they buy or sell shares of ETFs. Investors receive breakpoints on sales if they purchase a specified amount of a mutual fund, not an ETF.

Under what circumstances will the payout from a variable annuity increase?
A. The rate of inflation exceeds the AIR
B. The performance of the separate account exceeds the rate of inflation
C. The performance of the separate account exceeds the AIR
D. The performance of the separate account for the current period exceeds the performance of the separate account for the previous period

C. Whether the payment from a variable annuity changes depends on the relationship between the performance of the separate account and the assumed interest rate (AIR) in the contract. If the account performance exceeds the AIR, the payment will be greater than the last payment. If the account performance equals the AIR, the payment will be unchanged from the last payment. If the account performance is less than the AIR, the payment will decline from the last payment.

An uncle would like to invest for his nephew's college education. Which of the following factors is a benefit of a 529 plan?
A. Uniformity of state taxation
B. Pretax contributions
C. Change of beneficiaries allowed
D. No limits on contributions

C. The owner of a 529 plan may change beneficiaries. Contributions are made on an after-tax basis, and are based on state rules, which vary from state to state. Contributions are limited, and vary by state.

Which TWO of the following statements are TRUE concerning hedge funds?
I. They do not have fees that include a percentage of assets under management and only charge a fee based on a percentage of the gains
II. They may employ a wide range of investment strategies that include selling short, arbitrage, derivatives, and the use of leverage
III. They are suitable for investors seeking liquidity
IV. They may place restrictions on withdrawals

A. I and III
B. I and IV
C. II and III
D. II and IV

D. A hedge fund is an investment fund that pools investors' money. Hedge funds may employ a wide range of investment strategies that include selling short, arbitrage, derivatives, and the use of leverage. Hedge funds often have higher fees than mutual funds, and their fees may include a percentage of assets under management and a percentage of the gains (for example, a 2% management fee plus 20% of the gains). Hedge funds are not required to publish the net asset value on a daily basis and might have restrictions on withdrawals, which can make their assets less liquid than those in mutual funds.

An investor owns 1,000 shares of a mutual fund. The offering price is $12 per share. The fund charges a 6% sales charge and has a 1% redemption fee. If the investor redeems his shares, he will receive approximately:

A. $11,167
B. $11,280
C. $11,880
D. $12,000

A. The investor owns 1,000 shares of the fund. The offering price is $12 per share. The sales charge is 6% or $0.72 ($12.00 offering price x 6% sales charge = $0.72). The net asset value is equal to $11.28 ($12.00 offering price minus the sales charge of $0.72 = $11.28 net asset value). The investor is selling 1,000 shares of the fund at the net asset value of $11.28. This equals $11,280. Deducting the redemption fee of $112.80 (1% of $11,280) from the net asset value of $11,280 equals approximately $11,167 that the customer receives from the fund.

Mr. and Mrs. Blue both have full-time jobs and are covered by their employers' pension plans. Mr. Blue's salary is $65,000. Mrs. Blue's salary is $75,000. If they file a joint tax return and each wants to open an IRA:

A. They will be prohibited from doing so since they are covered by their company's pension plans
B. They may open a joint IRA to consolidate their savings
C. Each may do so in separate accounts and may contribute up to $5,500 in each account
D. Each may do so in separate accounts with the maximum contribution for both accounts combined being $5,500

C. Since they both have earned income, they may each establish an IRA and contribute $5,500 to each account. Joint accounts are not permitted for IRAs.

Which of the following statements is TRUE regarding the straight life payout option available in a variable annuity?

A. It is the most conservative method for receiving payments
B. It allows for a beneficiary for the entire payout period
C. It provides the maximum cash flow of all payout options
D. It provides an equal amount each month for the investor's lifetime

C. The annuitant will receive the greatest cash flow from the straight life annuity payout option. This option allows the annuitant to receive payments as long as the annuitant is alive. At death, the payments stop. No beneficiary is designated and the insurance company is relieved of its liability to pay the balance of the plan. The annuitant has the greatest degree of risk with this type of payout and is entitled to the greatest cash flow. There are other payout options with less risk. The joint and last survivor life annuity allows payments to be made to two individuals as long as either annuitant is alive. Upon the death of one party, payments are made to the survivor. Upon the death of the survivor, payments cease. The life annuity with period certain entitles the annuitant to have a beneficiary for a specified number of years. If death occurs before the end of the specified period, the remaining payments are made to the beneficiary. If death occurs after the specified period, no further payments are paid to the beneficiary.

Ms. Taylor purchased $25,000 of mutual fund shares. To date, the fund has paid her $1,000 of net investment income and $500 of capital gain distributions. If Ms. Taylor reinvested all of these monies back in the fund, the cost basis of her total investment is:

A. $25,000
B. $25,500
C. $26,000
D. $26,500

D. All dividends, interest, and capital gains reinvested into a mutual fund are added to the investor's total cost basis. The $1,000 Ms. Taylor received in net investment income and the $500 she received in capital gains are added to her original purchase of $25,000 when reinvested in the fund.

Which TWO of the following statements are TRUE about real estate investment trusts (REITs)?

I. They must distribute 90% of their earnings to shareholders
II. They may invest only in short-term construction loans
III. They must invest in mortgages and securities
IV. Their profits are derived from the difference between the payments made on outstanding mortgages and the amount received in rental income

A. I and II
B. I and IV
C. II and III
D. II and IV

B. Real estate investment trusts (REITs) raise capital and invest the proceeds in real estate and mortgages. Their profit is derived from the rental income they receive as well as the difference between the interest they pay and the greater amount of interest they receive. In order to qualify for favorable tax treatment, REITs must pay 90% of their income to shareholders.

Benefits of a Mutual Fund - there are 3 here that I'm looking for

1) convenient and
2) cost effective
3) professionally managed portfolio

The Investment Company Act of ______ is the basic legislation governing investment companies


Three types of investment companies

1) Face-Amount Certificate Company
2) Management Companies
3) Unit Investment Trusts (UITs)

Management Companies also consist of:

1) Closed-End
2) Open-End - Mutual Funds

Face-Amount Certificate Company are:
A) Common
B) Rare

B) rare

Face-Amount Certificate Co. does what?

Issues debt certificates at a predetermined rate of interest

True or False: For Face-Amount Certificate Company, investors have to purchase certificates in periodic installments

FALSE: They normally do, but they are also able to use a lump-sum payment.

Face-Amount Certificate Company: True or False: Certificate holders are entitled to redeem their certificates for a fixed amount, on a specified date


Face-Amount Certificate Company: True or False: Certificates may NOT be redeemed prior to maturity for a specified surrender value

FALSE - they may be be redeemed prior to maturity for a specified surrender value

Unit Investment Trust is what?

A type of investment company that issue only redeemable securities, each of which represents an undivided in a specific portfolio of securities.

Unit Investment Trust: True or False: The portfolio generally remains fixed for the life of the trust so there is no need for day-to-day management of the portfolio


Unit Investment Trust: True of False: A UIT is a container into which other securities are placed

TRUE - this is just a comparison but I thought it would be helpful

Unit Investment Trust: True or False: The portfolio is said to be supervised, but not managed, and therefore there is never a management fee associated with a UIT


Unit Investment Trust: True or False: Investors pay a sales charge that is included in the offering price of a UIT


Example: A UIT has a 3% sales charge and an offering price of $1000. The sales charge amount would be $_____

What would the net investment value be?



Unit Investment Trust: The ongoing value of the UIT is based on the ______________ of the securities held in the trust's portfolio.

Net Asset Value (NAV)

Unit Investment Trust: True or False: UITs are typically sold through broker-dealers that generally will repurchase units from investors prior to maturity


Unit Investment Trust: Investors may qualify for a reduced sales charge (breakpoint) if they:

Purchase a certain dollar amount of a UIT

Unit Investment Trust: One type is called a "Fixed Trust". A fixed trust is a _______________ strategy where the portfolio is not traded

Buy and hold strategy: Example they provided was the following just for reference sake: a broker-dealer will create a portfolio of state specific municipal bonds having a single maturity date in the future. The investor will receive federally tax-free dividends from the portfolio and the principal at maturity.

Most common type of investment company is the:

management company

A management company can be either _________ OR _________

open-end or closed-end

An open-end investment company is one that:

continuously issues redeemable shares

A closed-end management company is what?

One that does NOT issue redeemable shares

Open-end management companies are also known as?

Mutual funds

Mutual Funds: True or False: A prospectus MUST be provided at or prior to a sale or offer of mutual funds


Mutual Funds: True or False: Mutual funds DO NOT have to stand ready to redeem at the shareholder's request

FALSE - they DO have to be ready to be redeemed at the shareholder's request

Mutual Funds: True or False: Every share issues is a new share and shares that are redeemed are destroyed


Mutual Funds: True or False: Shares are issued as common shares ONLY, and there is NO secondary market for the shares


Mutual Funds: When purchasing a mutual fund, the investor will pay____________

the public offering price (POP)

Mutual Funds: When redeeming a share, the shareholder will receive _______________

The net asset value

Closed-Ended Management Company may issue these three things

1) common stock
2) preferred stock
3) bonds

Closed-Ended Management Company: True or False: Continuously issues new shares and redeems shares

FALSE - it does NOT do either

Closed-Ended Management Company: once issued, the investor purchases and disposes the shares where?

Open market

Closed-Ended Management Company: investors pay a __________ or a markup or markdown to buy or sell shares


Closed-Ended Management Company: Market price is based on:

forces of supply and demand in the same manner that applies to most securities. This is in comparison to the others which were based on the net asset value per share.

Closed-Ended Management Company True or False: They can sell at a premium above net asset value or at a discount below NAV


Diversified management company means the portfolio has been invested as:
1) at least ___% of the assets must be invested
2) no more than ___% of the invested assets may be invested in any one company
3) the investment company may own no more than ____% of the voting stock of any one company

1) at least 75% of the assets must be invested
2) no more than 5% of the invested assets may be invested in any one company
3) the investment company may own no more than 10% of the voting stock of any one company

Diversified management company means the portfolio has been invested as:

1) at least 75% of the assets must be invested
2) no more than 5% of the invested assets may be invested in any one company
3) the investment company may own no more than 10% of the voting stock of any one company

Diversified management TRUE or FALSE: subsequent market fluctuations or consolidations will NOT nullify the company's status as diversified


True or False: a Hedge Fund is a public investment pool

False - they are private

True or False: Hedge Funds are NOT required to register with the SEC


Hedge funds typically have ________ minimum investment requirements
a) high
b) low
c) reasonable


TRUE or FALSE:Hedge funds are exempted from regulations governing short selling, derivatives, leverage, fee structures, and liquidity of interests in the fund


TRUE OR FALSE: Hedge funds ARE required to publish Net Asset Value on a daily basis

FALSE - they are not

TRUE OR FALSE: Hedge funds CAN have restrictions on withdrawals - making them less liquid than other funds


Hedge Funds: a "two and twenty fee" is what?

when a hedge fund manager charges a 2% management fee and then takes 20% of any profits earned.

Hedge fund of funds: is this a real thing?? What is it?

Yup, stupid, but its where a fund pools investors money and allocates it to different hedge fund managers, and then they charge a fee in addition to the fee charged by the hedge fund managers.

There are different types of Mutual Funds available... each appropriate for one client over another based on consideration of the following four goals of the client:

1) preservation of capital
2) income
3) growth
4) tax exempt income

There are 5 Common Stock Funds, and they are:

1) growth funds
2) income funds
3) option income funds
4) growth and income funds
5) index funds

True or False: Growth funds deal mainly with capital appreciation


What kind of stocks do growth funds typically invest in?

Those that will show an above-average growth in share price

True or False: growth shares are MORE vulnerable to market risk


TRUE or False: They have a higher potential for short-term appreciation:

FALSE - long term appreciation and are most appropriate for investors with long-term investment objectives who can tolerate fluctuations in their principal

Aggressive growth funds invest in what?

small companies, initial public offerings

True or False: Aggressive Growth Funds can be very volatile, but historically have also produced high returns for long-term investors


Equity Income Funds primary objective is:

current income

Equity Income Funds invest in whom?

companies that pay high dividends in relation to their market price

Growth and Income Funds are concerned with what objectives?

Capital appreciation and current income

Growth and Income Funds invest in companies that are expected to show ______ growth than typical equity income stock and _________ dividends than most growth stock.

more and higher

Growth and Income Funds usually show _____ capital appreciation than pure growth funds and ________ dividends than income funds.

less, and lower

Bond Funds main objectives are _______________ and ____________

current income and preservation of capital

TRUE or FALSE: Bond funds are susceptible to the same risks as direct investment in bonds, such as cedit risk, call risk, reinvestment risk, and some degree of interest-rate risk


Government bonds invest in ________

Treasury securities

Mortgage-backed funds usually


municipal securities rule making board

This organization was created in 1975 as an independent self-regulatory organization designed to oversee the municipal securities industry (MSRB)


This type of security is not subject to the registration requirements of the securities ACT of 1933 nor the reporting requirements of the SEC act of 1934

brokers dealers bank dealers

These 3 people must register with the SEC

bank dealer

A ____ ______ is a separately identifiable department or division of a bank. The municipal trading records must be kept separate from any other bank records


a representative is prohibited from conducting any business for a minimum period of __ days after commencement of employment and also must pass the qualifying examination

municipal government

A person who is a municipal securities representative only can sell ________ securities and _________ securities but not shares of an investment company


which regulator is primary responsible for enforcement, inspection and rule making


Which regulator is responsible for rule-making authority. this entity does not enforce any of the rules it makes.


this regulator has enforcement authority for its members who are also subject to MSRB rules

FDIC FRB Comptroller

If the firm is a bank dealer it may be subject to "enforcement" by which 3 regulators?

same day

How long does it take for cash to settle?


How long does it take normal transactions to settle?

good delivery

If the bearer certificate is mutilated to a point where important items on the certificate cannot be ascertained -- all unpaid coupons must be attached, legal opinion must be attached

6 2

most records must be kept for a minimum of _ years with the most recent _ years in an easily accessible location


A dealer shall be confirmed within _ day following the trade date (if cash, same day)


Confirmation must be sent to the _______ in writing at or before the completion of a transaction and disclose the capacity in which the dealer acted

non callable

Confirmations of ___ ________ municipal bond transactions would not include the taxable equivalent yield


A _______ quote is for informational purposes only

best possible

Transactions must be done at the ____ _______ prices for the benefit of the customer

tax status

With municipal securities the customers ___ ______ is especially important as well as his present portfolio


___________ order may not be processed without suitability data, if not suitable, order may be executed if customer so directs


Gifts are limited to $___ per person per year, season hockey tickets would violate this limit

prohibited principal

False or misleading advertising is __________. The _________ of the firm must approve in writing all advertisements prior to initial use

official statements

Market letters, offering circulars and summaries of all official statements are considered advertising, _______ ________ are not

must be disclosed

Any relationship between the securities firm and the municipality _____ ___ _________ no later than the settlement date


Financial advisory activities must be in _______


Use of ownership information obtained in a fiduciary capacity is __________.


Improper use of assets is _________

principals approve

All firms must have designated _________ who ________ all accounts, transactions and general outgoing materials

Written duplicate prior

______ notice must be sent to the employer of the other municipal dealer firm prior to the opening of accounts. Furthermore, that firm must also receive a _________ copy of every confirmation. Each transaction does not need _____ approval.

MSRB manual

A copy of the ____ _______ must be made available to all customers upon request

should not background

The price paid for a dealer's inventory ______ ___ be considered when determining a fair commission. the customers financial __________ is irrelevant


Reciprocal dealings with municipal business from an investment company based upon sales of shares in the investment companies is _____________

official statement offering circular

A final copy of the ________ _________ or _________ ________ (instead of a prospectus) must be sent to each customer prior to the settlement


Disputes between municipal securities firms or firms and employees must go to ___________

may not buy loss

Municipal securities dealers ___ ___ sell a security to a customer with a guarantee to ___ the security back at any time without ____ to the customer- dealer cannot share a customers loss


This is an employee of a member firm of the NYSE or NASD who solicits business and provides investment information for the benefit of the member firm

constitution NYSE

All RR must sign an agreement to abide by the __________ and the rules of the ____


RR may not ______ customers certificates

truthful good

All advertisements must be _______ and in ____ taste

principal prior

Approval of all advertisements, research reports, market literature and sales literature must be done by the ________ of the firm _____ to use


A log of all talks and lectures should be kept for _ years by the firm- must be for a broadly education purpose & literature on pick up basis only

number letter

If a customer opens an account by using a ______ or symbol in place of his name, a ______ from the customer must be on file at the member firm attesting to the ownership of such account

prior approval duplicate confirmations

THe opening of a cash or margin account for the employees of other member firms requires the employer's _____ ________. Also. ________ ______________ and statements must be sent to the employers

principal approve marked

A _________ of the firm must _______ all discretionary accounts initially, as well as initial each order on the day the order is entered. All discretionary orders must be ______ as such.


The customer must receive at least _________ statements showing current money and security position

price binding error

The _____ of an actual trade is _______ despite the fact that it may have been confirmed in _____

bunched round customer

Odd lot orders may be _______ with two or more odd lot orders on the same stock and entering them as a _____ lot with prior written approval of the ________

arbitrated binding appealed

Disputes must be __________ amongst members of the NYSE and/or their employees. The findings are ________, they may not be _________.

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