Chapter 6 Practice Questions
- 1. For which of the following would you not receive a certificate?
- A. Bearer bond
- B. Partially registered bond
- C. Fully registered bond
- D. Book-entry bond
- 2. Which type of bond is typically held in “street name”?
- A. Bearer bond
- B. Partially registered bond
- C. Fully registered bond
- D. Book-entry bond
- 3. Reclamation refers to:
- A. A claim for the right to return or to demand the return of a security after it has been previously accepted
- B. A transaction to purchase a security after having sold the same security within the past 30 days
- C. The ability of an underwriter to reclaim part of the price of a security from a dealer if it is flipped
- D. The ability of an underwriter to buy up unsold shares in a new issue
- 4. Securities certificates must be delivered with ____________ unless identified as “ex legal” at the time of the trade.
- A. A form letter
- B. Legal opinions
- C. Insurance
- D. A preliminary prospectus
- 5. For zero coupon municipal securities, which of the following is not true regarding the customer trade confirmation?
- A. It must show the maturity value of the securities if differs from par value.
- B. It must state the accrued interest.
- C. It must specify that the interest rate on the securities is 0%.
- D. It must show the lower of the yield to maturity or the yield to call.
- 6. Which of the following does not need to be shown on a customer trade confirmation for a tax-free municipal security?
- A. Whether the dealer acted as an agent or principal to the transaction
- B. A designation that the securities are tax exempt at the federal level
- C. The total amount of the transaction along with the accrued interest
- D. Calculated yield
- 7. Which of the following municipal securities needs to list t