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UNIT 3 TEST - MUNICIPAL SECURITIES
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UNIT 3 TEST - MUNICIPAL SECURITIES
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Name: Score:151 Multiple choice questions
Term 1 of 151
All of the following are allowable municipal dealer quotes EXCEPT
an unidentified nominal quote
requests for offers only
bona fide quotes
requests for bids only
Term 2 of 151
A customer buys 5 municipal bonds maturing in 20 years for 104. If he sells the bonds after 10
years at 103, the customer has a:
$50 capital loss.
$50 capital gain.
$100 capital gain.
$100 capital loss.
Term 3 of 151
If a municipal bond maturing in 10 years is bought for 110, its cost basis at the end of the sixth year
is:
106
101-½.
100.
104.
,Term 4 of 151
Which of the following documents would include information about the issuer's financial
condition?
Official statement
Bond resolution.
Notice of sale.
Trust indenture.
Term 5 of 151
When a registered representative recommends a municipal bond purchase to a customer, which
of the following would be of LEAST consideration regarding suitability?
Customer's tax bracket
The intended use of funds raised by the issue
Bond's rating
Customer's state of residence
Term 6 of 151
Advertising relating to municipal securities must be approved by which of the following?
The SEC.
A designated supervisory analyst
The MSRB
A general securities principal or municipal securities principal.
,Term 7 of 151
If an investor purchases a bond anticipation note (BAN) that matures in one year, when will the
investor collect the interest?
Monthly
Semiannually.
At maturity.
Quarterly
Term 8 of 151
The doctrine of reciprocal immunity most accurately describes
avoiding criminal prosecution in states outside the jurisdiction in which an illegal trade was
made
the view that neither the states nor the federal government may tax income received from
securities issued by the other
the prohibition of a broker/dealer from soliciting transactions in municipal securities for the
account of an investment company in return for sales by the broker/dealer, of shares or
units in the investment company
the exemption regarding securities-related crimes committed outside the U.S. by non-U.S.
citizens.
Term 9 of 151
A customer buys a municipal bond at 106 with 8 years to maturity. What is the amount of
unamortized premium at the end of 4 years?
50
40
36
30
, Term 10 of 151
A J & J Treasury bond with a 5% coupon due July 1, 2007, is purchased in a cash transaction on
February 24. What is the number of days of accrued interest?
55
54
63
53
Term 11 of 151
Net overall debt of a municipality is:
net direct debt minus overlapping debt.
funded debt plus overlapping debt.
net direct debt plus overlapping debt.
funded debt minus overlapping debt.
Term 12 of 151
A municipality that has issued GANs, short-term municipal notes, does so in expectation that the
debt service will be paid by the receipt of funds attained:
via grants from the federal government
through the issue of long-term bonds.
from future tax revenue.
from both tax and other anticipated revenue.
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