FINRA Exam Series 6 Exam Dumps

1. Which of the following statements about the over-the-counter market is true?

2. Which of the following is not an auction market?

3. The entity that serves as the auctioneer for trades conducted on an organized exchange floor is known as a:

4. Which of the following statements about specialists is false?

5. NASDAQ market makers provide investors with assurance that:

6. SuperDOT is:

7. GoForBroke Investments has registered with the SEC to be a market maker in certain NASDAQ-listed securities. In order to be able to enter bid and ask quotes for the securities in which it is going to make a market, GoForBroke must subscribe to which level of NASDAQ?

8. Which of the following is not a characteristic of all auction stock exchanges in the U.S.?

9. Which of the following is an example of a primary market transaction?

10. NASDAQ is:

11. All government bonds and the majority of corporate bonds are traded:

12. Which of the following types of securities would not be traded in the over-the-counter market?

I. stock options

II. government bonds

III. corporate bonds

IV. corporate stocks

13. Which of the following are duties of the specialist on an exchange floor?

I. executing limit orders if/when the limit price specified is reached

II. minimizing any imbalance in supply and demand for the stock(s) that the specialist is assigned

III. determining an opening price for each assigned stock every day

IV. serving as an auctioneer for the shares of the assigned stocks

14. The price at which an investor can sell a security to a market maker in the over-the-counter market is called the:

15. Mary is interested in buying shares of the Lambchops Corporation, which sells over-the-counter. The market maker with the best bid price--$3.15--is Veggie Investments. The market maker with the best ask price--$3.27-is Carnivor Investments. Mary conducts trades in NYSE-listed stocks through her broker, Omnivor and Associates.

Given this scenario, which of the following statements is true?

16. Noah Mete is interested in selling his shares of the Lambchops Corporation, which trades over-the-counter. The market maker with the best bid price--$3.15--is Veggie Investments. The market maker with the best ask price--$3.27-is Carnivor Investments. Noah conducts trades in NYSE-listed stocks through his broker, Omnivor and Associates.

Given this scenario, which of the following statements is true?

17. Which of the following represents a secondary market transaction?

18. Which of the following statements about primary market transactions is true?

19. A new issue of common stock can be classified in which of the following categories?

I. primary market

II. money market

III. secondary market

IV. capital market

20. Which of the following securities would be exempt from SEC registration requirements?

I. a 15-year bond issued by the state of Colorado

II. an issue of preferred stock that has an aggregate par value of $5 million

III. an issue of commercial paper that has a 5-month maturity

21. The investment banker bears the risk if the securities do not sell in a(n):

22. Which of the following steps in the underwriting process will occur last?

23. Which of the following is not a feature associated with an investment in preferred stock?

24. Nat Informed places a market order to buy 200 shares of Abercrombie & Fitch (ANF) on Thursday, September 16th.

When will Nat be required to pay for this Transaction?

25. Connie Serve placed an order to purchase five, $1,000 Treasury bonds in the secondary market on Tuesday, October 12th.

Connie will be required to pay for this purchase on which day?

26. On Monday, August 2nd, the Board of Directors of Baldor Electric (BEZ) announced that the firm would pay a dividend of $0.17 a share. Payment will be made on Friday, October 8th to shareholders of record as of Friday, September 17th.

In order to receive this dividend check, an investor would have to purchase shares of Baldor Electric before which day?

27. On Friday, August 6th, the Board of Directors of Ecolab (ECI) announced that it would pay a dividend of $0.155 a share to shareholders of record as of Tuesday, September 21st.The dividend checks were scheduled to be mailed on Friday, October 15th. In this scenario, the ex-dividend date is:

28. On Friday, August 6th, the Board of Directors of Ecolab (ECI) announced that it would pay a dividend of $0.155 a share to shareholders of record as of Tuesday, September 21st.The dividend checks were scheduled to be mailed on Friday, October 15th. In this scenario, the payment date is:

29. Given the same maturity, which of the following debt instruments would you expect to offer the highest yield-to-maturity?

30. Jack purchased a new bond of the Candlestick Corporation for its face value of $1,000. The bond has a coupon rate of 3.5%, makes semiannual interest payments, and matures in fifteen years. A year after purchasing the bond, Jack needs to sell the bond to offset some major expenses he incurred when his home caught on fire. Interest rates in the economy at this time have fallen to 3.0%.

Given this scenario, when Jack sells the bond, he can expect to receive which of the following?

31. MBIA, Inc., a municipal bond insuring company, has a bond issue that is selling for $80.05 per $100 of par. The bond has a coupon rate of 7%, with semiannual payments, and matures in 2025. The current yield on this bond is:

32. MBIA, Inc., a municipal bond insuring company, has a bond issue that is selling for $80.05 to yield 9.5%. The bond has a coupon rate of 7%, with semiannual payments, and matures in 2025.If interest rates in the economy increase, which of the following statements will be true, all else equal?

I. the nominal yield of the bond will increase.

II. the yield-to-maturity of the bond will increase.

III. the current yield of the bond will increase.

33. A bond has a face value of $1,000, matures in 10 years, and pays an 8% coupon, with interest paid semiannually. If the bond is priced to yield 8.8%, it is selling:

34. A bond has a face value of $1,000, matures in 12 years, and pays an 4% coupon, with interest paid semiannually. If the bond is priced to yield 3.5%, it is selling:

35. Which of the following is not a function performed by an investment banker as part of a full commitment underwriting?

36. A bond issued by the Needy Corporation pays an 8% coupon, matures in ten years, and is selling for its face value of $1,000. The yield-to-maturity on this bond is:

37. Which of the following bonds will experience the greatest percentage change in price for a given change in interest rates?

38. Pete Prophet, the manager of a bond mutual fund, is expecting interest rates to increase. All else equal, which of the following bonds would be the best investment under this assumption?

39. Common stock and preferred stock differ in that:

40. An ADR is:

41. A preemptive right:

42. Mr. Investor has purchased 100 shares of the common stock of the Everyman Corporation. As such, which of the following is not a right that Mr. Investor has?

43. A feature that gives a bondholder or the owner of preferred stock of a corporation the option to exchange his security for shares of the common stock of the firm is called a:

44. The stock of Southwest Airlines (LUV) is selling for $11.77 in mid-September. An October put on the stock is selling for $1.45 and gives the owner the right to sell the stock for $13.00 prior to its expiration. In this example, the option premium is:

45. In mid-September, the stock of Oracle (ORCL) is selling for $25.60 a share. Ms. Hedge owns shares of Oracle and buys a put option on the stock with a strike price of $27 that expires in October for $2.20 per optioned share. Just prior to expiration, Oracle’s stock is selling for $29. Ms. Hedge should:

46. In mid-September, the stock of Amazon.com, Inc. (AMZN) is selling for $147.A January call option on the stock is selling for $6.10 and has a strike price of $160. This call option is:

47. A warrant differs from a standard call option in that:

48. A type of preferred stock for which any dividends missed in prior years must be paid before common shareholders may receive any dividends is referred to as:

49. The stock of Hasbro Corporation (HAS) is selling for $44.50 and pays a dividend of $1.00 a share. What is its dividend yield, rounded to the nearest hundredth of a percent?

50. Simple Simon owns 1,000 shares in the Pasty Pie Corporation, which has just declared a stock dividend of 5%. Just prior to this announcement, Pasty Pie was selling for $10 a share. This announcement will:

51. Cliff places an order to sell 500 shares of the stock of Gap, Inc. (GPS) via his broker’s website. Cliff does not currently own any shares of GPS. This order is:

52. An order to buy or sell a stock at the prevailing market price is called a(n):

53. The stock of Nutrisystem, Inc. (NTRI) is selling for $17.70 when Miss Piggy places a limit order to buy the stock at $17.65. During the period the order is open, NTRI falls to $17.60 and then increases to $17.67.

Which of the following statements is most likely to be true in this scenario?

54. Mr. A. D. Venturer owns 10,000 shares of Risky Corporation, which is currently selling for $8 a share. He is leaving shortly for an extended trip to Antarctica and will be out of communication for that time. He doesn’t want to liquidate his investment in Risky before he goes, but he doesn’t want to return to find that his $80,000 investment is worth little to nothing.

Which of the following options would make sense for Mr. Venturer?

55. A long-term, unsecured bond issued by a corporation is called:

56. Which of the following is not a secured debt issue?

57. Steel Dynamics (STLD) has a convertible bond issue that matures in four years. The bond has a face value of $1,000 and pays a coupon of 5.125%, with interest paid semiannually. The conversion ratio is 56.9801. If the stock of Steel Dynamics is currently priced at $15 a share, what is the conversion value of this bond, to the nearest cent?

58. Which of the following relationships regarding shares of common stock are necessarily true?

I. shares outstanding > issued shares

II. authorized shares ≥ issued shares

III. issued shares = treasury shares

IV. issued shares ≥ shares outstanding

59. Which of the following statements regarding zero-coupon bonds is true?

60. Which of the following statements regarding CMOs is false?

61. You have a client, Richie Rich, who is in the 39.6% marginal tax bracket, and one of his investment goals is to minimize his payments to the IRS.

Which of the following instruments would serve this purpose?

62. Which of the following statements regarding callable bonds is false?

63. Which of the following securities always sell at a discount from their face values?

I. Treasury bills

II. Treasury notes

III. industrial revenue bonds

IV. banker’s acceptances

64. Which of the following is true about treasury bonds?

65. Which of the following is not a money market security?

66. Which of the following is true about a hedge fund?

67. Which of the following is not an advantage that an exchange traded fund (ETF) has over a traditional mutual fund?

68. Commercial paper is:

69. A general decrease in price levels in the economy is referred to as:

70. The Federal Reserve announces that it plans to buy $3.89 billion in Treasury securities on the open market. All else equal, which of the following is a likely result of this Fed action?

71. Which of the following are fiscal policy tools under the jurisdiction of the U.S. Congress?

72. Which of the following actions can be expected to result in a decrease in stock and bond prices, all else equal?

I. The Federal Reserve announces a decrease in the discount rate.

II. Congress votes to decrease payments to Social Security recipients.

III. Congress votes to decrease taxes.

IV. The Federal Reserve announces that it will sell some of the Treasury securities it owns on the open market.

73. When the U.S. dollar appreciates relative to other world currencies,

I. the prices of all domestic stocks and bonds can be expected to increase.

II. the prices of securities offered by manufacturers that import a lot of their parts can be expected to increase.

III. an increase in the purchase of U.S. securities by foreign investors can be expected.

74. The Securities Act of 1933 did what?

75. Ms. Scatty is a registered representative with a well-known family of mutual funds. When selling one of the funds, she forgets to give her buyer a prospectus.

Which of the following statements is true?

76. Mr. Big of HiGrow Corporation needs more money to support the exceptional growth rate that his firm is enjoying. He meets with BigFee Investment Banker, who agrees to handle the IPO for HiGrow. Subsequently, InTheLoop Brokerage is tapped to be part of the selling group that will handle the sale of the new stock to the public. In this example, the issuer is:

77. Mr. Big of HiGrow Corporation needs more money to support the exceptional growth rate that his firm is enjoying. He meets with BigFee Investment Banker, who agrees to handle the IPO for HiGrow. Subsequently, InTheLoop Brokerage is tapped to be part of the selling group that will handle the sale of the new stock to the public. In this example, the underwriter is:

78. Any person who willfully acts in violation of the Securities Act of 1933, or any SEC rule, is subject to a penalty of:

79. Mr. Big of HiGrow Corporation needs more money to support the exceptional growth rate that his firm is enjoying. He meets with BigFee Investment Banker, who agrees to handle the IPO for HiGrow. As part of the process, BigFee’s staff works with HiGrow’s accountants to prepare the registration statement that is filed with the SEC. After the issue has been sold to the public, Mr. Sharp, a CPA who has invested in the stock of HiGrow, discovers that there are some accounting irregularities in the financial statements provided in HiGrow’s prospectus.

Who can be sued for the misleading statements?

I. Mr. Big

II. Big Fee Investment Banker

III. HiGrow’s accountants

IV. HiGrow’s attorneys

80. Which of the following securities is not exempt from registration requirements?

81. Private placements are exempt from the registration requirements of the Securities Act of 1933 under the rules contained in:

82. Regulation D:

I. enables smaller firms to raise capital more quickly and more cheaply.

II. exempts the issuing firm from all disclosure requirements as long as the issue is being sold to no more than five investors.

III. has restrictions regarding the resale of the securities being sold.

83. Which of the following would qualify as accredited investors for a Regulation D offering?

I. your 45-year-old, spinster aunt who has earned in excess of $200,000 annually over the last ten years as a pediatric surgeon

II. your Uncle Miserly, who is reputed to have a net worth of $1.2 million

III. Tiny Brokers, a small broker-dealer with a single office in the state of Kentucky IV. a trust containing assets that are valued between $3.5 and $4 million

84. Private placements may be sold to whom?

85. Which of the following pieces of information may not be contained in a tombstone advertisement under SEC rules?

86. The Securities Exchange Act of 1934:

I. regulates the market for new issues.

II. delineates the registration requirements for investment advisers.

III. regulates secondary market activities.

IV. requires that officers and some other employees of member firms submit their fingerprints to the U.S. attorney general’s office.

87. Which of the following persons is not subject to the fingerprinting requirements of the Securities Exchange Act of 1934?

I. a registered transfer agent of a securities exchange

II. a firm that engages only in the sale of mutual fund shares

III. a receptionist at a brokerage firm who answers phones and directs calls to the agents employed by the firm

IV. a market maker in the over-the-counter market

88. Which of the following established the requirement that insiders report their trading activities to the SEC?

89. The primary difference between dealers and brokers is that:

90. Mr. Walt Street has observed that a Treasury note maturing in November of 2019 and paying a 3.375% coupon has a bid price of 105:25 and an ask price of 105:26.

In this instance, what is the dealers’ spread for every $1,000 of par value?