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Question 1

A customer purchased $80,000 of Fund XYZ two years ago. He now wants to buy $50,000 of Fund LMN offered within the same fund family, which offers a $100,000 breakpoint under right of accumulation. Which of the following statements is true?

Options :

A : The additional investment qualifies for a $100,000 breakpoint.

B : Each fund requires contributions of $100,000 to qualify for a breakpoint.

C :

The customer must sign a new letter of intent to receive the $100,000 breakpoint on the additional purchase.

D :

The customer will receive a sales charge discount on his next purchase after the account balance of the fund reaches $100,000.

Answer: A

Question 2

Assuming yields are held constant, which of the following statements describes what will occur as a discount bond reaches maturity?

Options :

A : Its price increases.

B : Its price decreases.

C : Its par value increases.

D : Its par value decreases.

Answer: A

Question 3

Which of the following terms describes failure to honor a firm quote?

Options :

A : Freeriding

B : Backing away

C : Interpositioning

D : Market manipulation

Answer: B

Question 4

Which of the following is considered nonpublic information?

Options :

A : Customer-s name

B : Customer-s address

C : Customer-s net worth

D : Customer-s telephone number

Answer: C

Question 5

The process in which the buying firm must pay for the securities and the selling firm must deliver the securities is known as:

Options :

A : A corporate action

B : Clearing the trade

C : The settlement of the transaction

D : A delivery versus payment (DVP) transaction

Answer: C