The XYZ Corporation's income statement contains the following information:
Total revenue $200,000
Cost of goods sold $60,000
Administrative expenses $30,000
Depreciation $10,000
Miscellaneous expenses $3,000
Taxes paid $5,000
Based on this information, what is XYZ's gross profit?
A. $...
Series 65: Midterm Exam || A Verified A+ Pass.
The XYZ Corporation's income statement contains the following information:
Total revenue $200,000
Cost of goods sold $60,000
Administrative expenses $30,000
Depreciation $10,000
Miscellaneous expenses $3,000
Taxes paid $5,000
Based on this information, what is XYZ's gross profit?
A. $140,000
B. $100,000
C. $97,000
D. $110,000 correct answers $140k
An investor purchased 300 shares of Amalgamated Auto Parts (AAP) at a price of $60 per share.
Shortly after the purchase, with the price of AAP at $62, the investor sold three AAP 60 call
options when the premium was 6 points. At expiration, AAP stock was trading at $53 per share.
The net result to this investor is
A. a gain of $100.
B. a loss of $100.
C. a gain of $300.
D. a loss of $300. correct answers A loss of $300
When plotted on a graph, the difference between short- and long-term interest rates typically
reflects an upward-sloping line known as the yield curve. When it is an upward-sloping curve, it
is a positive or normal yield curve. Long-term interest rates are typically higher than short-term
rates for a number of reasons. Among those reasons are all of the following except
A. the increased risk of default over long periods.
B. the time value of money.
C. the increased buying power of money resulting from inflation.
D. the loss of liquidity associated with long-term investments. correct answers The increased
buying power of money resulting from inflation
Which of the following qualifies under the Section 28(e) safe harbor provisions for soft dollar
compensation?
A. Providing access to the broker-dealer's computerized accounting system, allowing the
investment adviser to prepare its financial statements
B. Reimbursement for travel expenses incurred to attend a seminar on the latest compliance
trends for registered investment advisers
,C. Clearance and settlement services provided by the broker-dealer
D. Rent-free use of unused space in the broker-dealer's office correct answers Clearance and
settlement services provided by the broker-dealer
An investment adviser that has custody of customer funds and securities discovers that its net
worth has dropped below the required minimum under the rules of the state Administrator.
Under NASAA rules, the adviser must do which of the following?
1. Notify the Administrator by the close of business on the day after discovery
2. File a report of its financial condition with the Administrator no later than the close of
business on the day after notification
3. Cease doing business correct answers Notify the Administrator by the close of business on the
day after the discovery and file a report of its financial condition w/ the Administrator no later
than the close of business on the day after notification
Under the NASAA Model Custody Rule, an investment adviser (IA) would be permitted to take
or have custody of any securities or funds of any client if
A. customer permission was obtained prior to entering into the contract.
B. the IA maintained adequate net worth or a surety bond.
C. permission was obtained from the Administrator and custody was not prohibited by that state's
rules.
D. notification was given to the Administrator that he has or may have custody and custody was
not prohibited by that state's rules. correct answers Notification was given to the Administrator
that he has or may have custody and custody wasn't prohibited by that state's rules
One of your clients sits on the board of directors of a company whose stock trades on the New
York Stock Exchange. Two months ago, the client purchased 500 shares of the stock at $50 per
share. Needing some additional cash for an upcoming vacation, the client has decided to sell this
stock when the market price is $48 per share. You can make this trade as long as it complies with
the provisions of
A. Regulation A.
B. Rule 144.
C. Regulation D.
D. Rule 147. correct answers Rule 144
Senescent Retirement Planning (SRP) is registered as a broker-dealer with the SEC and a number
of states. As such, the client relationship summary (Form CRS) must be delivered to each retail
investor before or at the earliest of any of these except
A. entrance into an investment advisory contract with the retail investor.
B. a securities transaction or an investment strategy involving securities described to a retail
investor.
C. the opening of a brokerage account for the retail investor.
, D. placing an order for the retail investor. correct answers Entrance into an investment advisory
contract w/ the retail investor
An investor is looking at purchasing $10,000 face of bonds. One choice is U.S. Treasury bonds
priced at 104.24, and the other choice is AAA-rated corporate bonds priced at 103⅜. How much
more will the Treasuries cost?
A. $13.75
B. $137.50
C. $8.65
D. $86.50 correct answers $137.50
ABC Securities is a broker-dealer registered with the SEC and domiciled in State M. ABC
Securities is not be defined as a broker-dealer in State N under the Uniform Securities Act if it
has no offices in State N and if which of the following are true?
1. Its only clients are insurance companies.
2. It has contact with fewer than six State N residents in any 12-month period.
3. Its only solicitation of State N residents is through radio advertisements originating in State M
but received in State N.
4. It occasionally engages in firm commitment underwriting with issuers based in State N.
correct answers Its only clients are insurance companies and it occasionally engages in firm
commitment underwriting w/ issuers based in State N
Vivandiere Fashions, Inc. (VFI) is expanding and wishes to raise additional capital by bringing
in additional owners. This would best be accomplished by issuing
A. debt securities.
B. options.
C. partnership units.
D. equity securities. correct answers Equity securities
The main driver of cryptocurrency values is
A. unlimited supply of currency units.
B. asset appreciation.
C. low price volatility.
D. lack of fungibility. correct answers Asset appreciation
The consumer price index is best described as
A. an unbiased estimate of changes in the cost of living.
B. a measure of transactions between a country and the rest of the world over a period of time,
usually a year.
C. a weighted average cost for a basket of goods and services.
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