Series 65 || A+ Verified Solutions.
Which of the following is TRUE of a business cycle pattern?
I. the pattern is impacted by Gross Domestic Product (GDP)
II. just prior to a trough, the economy is in an expansionary phase
III. depression is defined as GDP declining for at least eight consecutive quarters
IV. recession is defined as GDP declining for at least four consecutive quarters
A. I., III., and IV.
B. I., II., and IV
C. I. only
D. I. and III. correct answers C.
Which of the following are TRUE of inflation?
I. as inflation increases, bond prices increase, and interest rates fall
II. inflation is characterized as a general economic price increase as measured by an index such
as the consumer price index (CPI)
III. excessive demand is one contributing cause of inflation
IV. inflation inertia occurs when the inflation rate is seen to be immediately impacted by changes
in the economy
A. II. and IV.
B. II. and III.
C. I., III., and IV.
D. I., II., and III. correct answers B.
Which of the following measures of central tendency is defined as measuring the most common
value in a given distribution of numbers?
A. mean
B. median
C. range
D. mode correct answers D.
All of the following are examples of systematic risk EXCEPT:
A. purchasing power risk
B. market risk
C. interest rate risk
D. financial risk correct answers D.
Sunny Brokers is a broker-dealer registered in the State of Summer. Sunny Brokers has no place
of business in the State of Winter, but is considering taking on some clients there. Which clients
can Sunny Brokers take on without having to register in the State of Winter?
,I. Cloudy Brokers, a broker-dealer domiciled in the capital city of the State of Winter
II. Winter Bank, a community bank serving the rural areas of the State of Winter
III. The pension trust for the State of Winter police force
A. I only
B.II only
C.I, II and III
D.I and III only correct answers D.
Renee, Rick, and Roberta open up an investment advisory firm. They structure the firm as a
general partnership, with equal ownership among them. Edna, a client of Rick's, is unhappy and
files a lawsuit against the firm. Which of the following is liable for damages that may result from
Edna's case?
I. The partnership as an entity
II. Rick personally
III. Renee personally
IV. Roberta personally
A. I, II, III and IV
B. I only
C. II, III, and IV only
D. II only correct answers C.
On March 1, Derek files an application with the state securities Administrator to become an
investment adviser representative. If the Administrator does not enter any order or rule to change
the normal effective date of the application, Derek's application will become effective
A. at noon on March 11
B. at noon on March 31
C. at noon on April 30
D. upon receipt by the administrator correct answers B.
Trapezoid Investments is an investment adviser that manages client portfolios. Trapezoid
Investments is considering charging several clients a fee based on its portfolio performance vs.
the performance of the S&P 500. For which of the following clients is such an arrangement
allowable?
I. Maria, a client with $100,000 in assets to invest with Trapezoid
II. Cory, who has $2,000,000 of assets to invest with Trapezoid
III. A mutual fund
A. I, II, and III
B. II and III only
C. III only
, D. None of the choices listed correct answers B.
XYA a manufacturer of computer circuit boards has $50,000,000 worth of subordinated
debentures outstanding. Each debenture carries an interest rate of 6.5% and has warrants attached
to the debenture to purchase 5 shares of XYA at $25 per share. XYA's stock is trading in the
market place at $28 per share and the warrants are about to expire. How many new shares can
XYA reasonably expect to issue?
A. 50,000
B. 250,000
C. 500,000
D. 25,000 correct answers B.
One reason an investor would not use internal rate of return to analyze a potential investment in
common stock is:
A. The market price of common stock moves to quickly
B. There is no maturity date
C. The issuance of new shares can cause dilution
D. Preferred stock has a senior claim on corporate earnings and assets correct answers B.
An investor wants to save $100,000 to purchase a second home in 5 years. He wants to make a
lump sum deposit to meet this 5 year goal. To calculate his required deposit he will need to know
all of the following except:
A. Net present value of $100,000
B. Compounding periods
C. Interest rates
D. Future value of $100,000 correct answers D.
An investor may use the dividend end discount model to calculate an approximate:
A. Market price for the stock
B. PEG ratio
C. Annualized current yield
D. Holding period return correct answers A.
All qualified dividends for ordinary income earners are:
A. Taxed as ordinary income each year
B. Tax-free income
C. Taxed as special interest-free income
D. Taxed at a set rate of 15% correct answers D.
All of the following are rights of common stockholders, except:
