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Mastery examination Chapters 1-4 Series 65 Exam correctly answered to pass
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Mastery examination Chapters 1-4 Series 65 Exam correctly answered to pass
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Mastery examination Chapters 1-4Series 65 Exam
During a recession an Investor will buy _______________ bonds, and sell ________________ bonds. -
correct answer ✔✔corporate | government
The yield spread between government and corporate bonds during a recession should _____________ -
correct answer ✔✔widen
Ad Valorem tax - correct answer ✔✔A tax levied according to value, generally used to refer to real estate
tax. Also called the general tax.
Special tax bonds - correct answer ✔✔backed by special taxes (e.g., taxes on tobacco, gasoline,
hotel/motel stay) for a specific project or purpose, but not by ad valorem (property) taxes
Special tax bonds are - correct answer ✔✔non-self supporting debt backed by sales or excise taxes
Self Supporting debt - correct answer ✔✔a municipal revenue bond that pays debt service (both interest
and principal) from the revenues generated from an enterprise activity. (Revenue Bonds)
Non Self Supporting Debt - correct answer ✔✔municipal general obligation bonds that are paid from tax
collections; they are not paid from the revenues from a facility. General obligation bonds are non-self
supporting debts since they are "carried on the backs of the taxpayers".
Excess Contributions to an IRA are subject to a - correct answer ✔✔6% penalty tax. It actually will apply
until the extra monies are taken out of the account.
There is a ____% penalty for early withdrawals from an IRA. - correct answer ✔✔10
,Which of the following can initiate repurchase agreements with governments and agency securities as
collateral? - correct answer ✔✔Through open trading desk:
Commercial banks
Federal Reserve Banks
Government Securities Dealers
Federal Home loan Banks sell ________ to obtain funding, With the funds, it buys mortgages from
savings and loans, making a _____________ mortgage market by injecting fresh funds in the market -
correct answer ✔✔bonds ; secondary
If a gift of securities is made to a charity, which of the following statements are TRUE?
I The donor gets to deduct the market value of the securities if the securities have been held for over 1
year
II The donor gets to deduct the market value of the securities regardless of the length of time they were
held
III The cost basis to the recipient is the same as the donor's
IV The cost basis to the recipient is the same as the market value of the securities on the gift date
A I and III
B I and IV
C II and III
D II and IV - correct answer ✔✔I IV
Margin account - correct answer ✔✔a brokerage account in which, subject to limits, securities can be
bought and sold on credit
, Margin account - correct answer ✔✔Long = MV - Debit Balance.
Margin Account - correct answer ✔✔Short = Credit Balance - Market Value.
the payments received from a bond can be used to determine the bonds theoretical market price by: -
correct answer ✔✔taking the present value of the payments and adding them up.
What strategy provides a gain equal to the premium in a bear market? - correct answer ✔✔Short
Call( The writer of a call) Agrees to sell the stock at a fixed price. So If the price falls, the call expires, and
the investor is out of the money but the writer of the call collected a premium.
Long Call Option - correct answer ✔✔gives the investor the right to buy a security at a specified price in
the future. Bullish position. Max gain = unlimited.
Long Put Option - correct answer ✔✔Gives the investor the right to sell the option at some point in the
future. Bearish position. Breakeven = strike price - premium
Long Put Option Strategies - correct answer ✔✔- speculation
- deferring a decision
- protection of a long stock position
Long Put - correct answer ✔✔a put buyer owns the right to sell 100 shares of a specific stock at the
strike price before the expiration if he chooses to exercise
A buyer of a long put option hopes that the market - correct answer ✔✔falls so they can sell at the strike
price. It retains the value of a stock. It's also a hedge against a buy and hold option.
On the other side of that is a Short Put writer whom.. - correct answer ✔✔Writes the option contract in
hopes that the market will go up so the buyer won't exercise the contract, hence the writer has collected
the premium and moved on.
A risk adjusted return is the..... - correct answer ✔✔Return / Beta
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