Series 65 Exam Lesson 36 Quiz options pt. 3

This is a Series 65 Exam Lesson 34 Options pt 1: a free quiz for Series 65 Exam Lesson 34 Quiz which is covering Options part 1 . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 36 Quiz options pt. 3

Series 65 Exam Lesson 36 Quiz options pt. 3 covering more option strategies you need to understand for the Series 7 Exam

Below are questions based on the lesson 35  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 36 Quiz options pt. 3

1. It refers to the number of options that are currently trading in the market.

A. breakeven point

B. open interest

C. utility

D. volatility

2. The following increases open interest EXCEPT:

A. buying to close

B. buying to open

C. selling to open

D. All of the above increase open interest.

3. If you bought an option and you want to sell it, the market price of the option would be ___.

A. the option’s time value at expiration date

B. the option’s intrinsic value at expiration date

C. the option’s intrinsic value when you bought the option

D. the option’s premium

4. Which of the following factors least affect the premium of an option?

A. dividend

B. interest rate

C. option time period

D. volatility

5. If you want to short a stock and interest rates are high, you have to pay higher margin interest rates.

A. True

B. False

6. Utility stocks used to be referred to as ___.

A. county stocks

B. growth stocks

C. value stocks

D. widow-and-orphan stocks

7. Why do utility stocks often have low premium options?

A. Utility stocks often have high income.

B. Utility stocks often have high volatility.

C. Utility stocks often have low income.

D. Utility stocks often have low volatility.

8. It is the measure of a stock’s volatility in relation to the market.

A. beta

B. theta

C. vega

D. veta

9. Which of the following is NOT true about beta?

A. A beta lower than one means that the stock moves more than the market does in general.

B. A beta of one correlates equally with the market.

C. High beta stocks will have higher option premiums.

D. High dividend stocks have a lower beta.

10. If you short a stock and the stock pays a dividend, you are required to pay the dividend when that dividend comes do.

A. True

B. False

11. Compared to call premiums, put premiums are lower on a high dividend stock.

A. True

B. False

12. Which of the following would yield a low option premium?

A. An option with a high dividend on the stock.

B. An option with a high volatility.

C. An option with a long time period before expiration.

D. all of the above

13. If you think the stock would go up, which is the best option strategy to take?

A. Buy a long call option.

B. Buy a long put option.

C. Write a covered call.

D. Write a naked call.

14. Why is it wise to write a covered call when the stock would go down?

A. so that the call option would not be exercised and you can keep the premium

B. so that you can buy the stock at a lower strike price

C. so that you can profit by selling the stock at a higher price

D. all of the above

15. If you long a call, that gives you the right to buy the stock at a specific strike price.

A. True

B. False

16. If you short a put, you are obligated to deliver the stock if it is called away from you.

A. True

B. False

17. A stock is selling at $50. A call option on that stock has a strike price of $70. The premium is $5. What is the breakeven for this option?

A. $45

B. $55

C. $65

D. $75

18. You wrote a covered call for a stock.

Series 65 Exam Lesson 35 Quiz options pt. 2

This is a Series 65 Exam Lesson 34 Options pt 1: a free quiz for Series 65 Exam Lesson 34 Quiz which is covering Options part 1 . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 35 Quiz options pt. 2

Series 65 Exam Lesson 35 Quiz options pt. 2 covering more option strategies you need to understand for the Series 7 Exam

Below are questions based on the lesson 35  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 35 Quiz options pt. 2

Below are questions based on Lesson 35. Choose the letter of the correct answer.

1. It is the cost of an option.

A. bid price

B. ask price

C. premium

D. strike price

2. The premium contains the option’s ___.

A. intrinsic value

B. time value

C. both intrinsic value and time value

D. neither intrinsic value nor time value

3. This refers to the number of options that are open for trading in the market.

A. bid

B. volatility

C. open interest

D. volume

4. This refers to the number of options that were sold or traded for the given day.

A. bid

B. volatility

C. open interest

D. volume

5. It refers to the amount of uncertainty or risk about the size of changes in a security’s value.

A. open interest

B. premium

C. volatility

D. volume

6. Parity is when the strike price and the stock are selling at exactly the same price.

A. True

B. False

7. An option is created by writing covered calls.

A. True

B. False

8. Writing a covered call ___.

A. decreases open interest

B. decreases volume

C. increases open interest

D. increases volume

9. If a person wrote an option (such as a covered call) and is now buying back the option, he is opening a position.

A. True

B. False

Series 65 Exam Lesson 35 Options pt 2 Cont:

10. Person A writes a covered call option and Person B buys that option. Which of the following is true?

A. Person A sells to close and Person B buys to close.

B. Person A sells to close and Person B buys to open.

C. Person A sells to open and Person B buys to close.

D. Person A sells to open and Person B buys to open.

11. This is used in determining the theoretical value of an option.

A. Black-Scholes model

B. Fed model

C. Sharpe ratio

D. Sortino ratio

12. It serves as an insurance to your investment portfolio.

A. covered call

B. married put

C. naked call

D. put on a put

13. An option without intrinsic value always has no time value.

A. True

B. False

14. A naked put is written by a person who owns the stock.

A. True

B. False

15. A call option is offered on a stock. If the current price of the stock is $20 and the strike price is $15, what is the intrinsic value of the option?

A. $2.5

B. $5

C. $10

D. There is no intrinsic value in this option.

16. A call option is offered on a stock. If the current price of the stock is $12 and the strike price is $10, what is the premium of the option?

A. $1

B. $2

C. $11

D. The premium of the option cannot be computed from the given facts.

17. A call option is offered on a stock. The current price of the stock is $20 and the strike price is $15. The call option’s premium is $8. What is the time value of the option?

A. $2

B. $3

C. $4

D. There is no time value for this option.

18. An option is selling at $6 per share and the option is for 10 shares. If you bought the option for a bid price of $5.50 per share, how much will you pay for the option for 10 shares?

A. $5.50

B. $6

C. $55

D. $60

19. If the stock is currently selling at $30 a share an...

Series 65 Exam Lesson 34 Options pt 1

This is a Series 65 Exam Lesson 34 Options pt 1: a free quiz for Series 65 Exam Lesson 34 Quiz which is covering Options part 1 . Try it and see how you do if you need help listen to the lesson over.

Series 65 Exam Lesson 34 Options pt 1

This is a Series 65 Exam Lesson 34 Options pt 1 which is Options pt. 1. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

Below are questions based on the  lesson 34  of the series. Choose the letter of the correct answer.

1. The oldest recorded option was about _____ getting options on the use of olive presses for a small price and charging olive growers exorbitant price for the use of those olive presses.

A. Nassim Taleb

B. Parmenides of Elea

C. Pythagoras

D. Thales of Miletus

2. It gives the holder or buyer of the option the right to purchase a specific number of shares of stock.

A. call option

B. order option

C. purchase option

D. put option

3. All of the following are needed in evaluating the value of an option EXCEPT ___.

A. expiration date of the option

B. interest rate

C. stock price

D. strike price

4. The premium is the price paid for an option.

A. True

B. False

5. Brokerage firms require same-day settlement on the options that are bought from them.

A. True

B. False

6. In a call option, it is the price at which the stock can be bought.

A. option price

B. option rate

C. stock price

D. strike price

7. Which of the following makes a call option valuable?

A. when the stock price is greater than the strike price after the expiration of the option

B. when the stock price is greater than the strike price before the expiration of the option

C. when the strike price is greater than the stock price after the expiration of the option

D. when the strike price is greater than the stock price before the expiration of the option

8. The more time you have on the option, the more expensive the option becomes.

A. True

B. False

9. In the “in the money option”, the strike price is above the current stock price.

A. True

B. False

10. It is the difference between the strike price and the current stock price when the strike price is lower than the current stock price.

A. absolute value

B. intrinsic value

C. option value

D. par value

Series 65 Exam Lesson 34 Quiz Continued

11. If the stock price increases before the option expires, the intrinsic value of the option ___.

A. decreases

B. increases

C. remains constant

D. There is no direct relationship between the stock price and the intrinsic value of the option.

12. It is the price paid over the intrinsic value for the time period of the option.

A. premium value

B. premium intrinsic value

C. settlement value

D. time value

13. When the time value of the option declines to zero, what is left to the option at the time of expiration is its ___.

A. intrinsic value

B. par value

C. strike value

D. The time value will never decline to zero.

14. It is the right to sell the stock at a specific price.

A. call feature

B. call option

C. put feature

D. put option

15. In a put option, it is the price at which the stock can be sold.

A. option price

B. option rate

C. stock price

D. strike price

16. If the current price of the stock in the market is $60 and it was offered in a call option at a strike price is $50, what is the intrinsic value of the option?

A. $10

B. $110

C. $5

D. $55

17. An option that has expired loses its intrinsic value.

A. True

B. False

18. If you bought a call option at a premium of $18 t...

Series 65 Exam Lesson 22 Quiz

This is a Series 65 Exam Lesson 22: a free quiz for Series 65 Exam Lesson 22 Quiz which is covering Credit Default Swaps, Adjustable Rate Securities and SPV’s. Try it and see how you do if you need help listen to the lesson over.

Series 65 Lesson 22 Quiz

This is a Series 65 Lesson 22 Quiz which is covering Credit Default Swaps, Adjustable Rate Securities and SPV’s. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

Questions:

Below are questions based on the previous lesson. Choose the letter of the correct answer.

1. Which of the following are derivative type products?

(Select all that apply.)

A. auction rate securities

B. credit default swaps

C. exchange-traded notes

D. market index-linked CDs

2. The reason you would buy a credit default swap if you are a speculator is you expect the credit worthiness of a company to ___.

A. go up

B. go down

C. be constant

D. be the same as the leading index on the market

3. Credit default swaps are traded ___.

A. on floors

B. on the primary market

C. on the secondary market

D. over-the-counter

4. There is no limit to the number of credit default swaps that can be written on any specific position.

A. True

B. False

5. It is a credit default swap used as a hedge vehicle for a position.

A. covered CDS

B. indexed CDS

C. married CDS

D. naked CDS

6. It is a credit default swap for bonds that you speculate on but do not own.

A. covered CDS

B. indexed CDS

C. married CDS

D. naked CDS

7. How much would you pay for a credit default swap of a $50,000 worth of bonds that has a spread of 25 basis points?

A. $125

B. $200

C. $2,000

D. $12,500

8. In a Dutch auction, a person actually puts back the bond to the issuer.

A. True

B. False

9. It is the lowest rate where there are enough purchasers willing to buy all the auctionable securities at a Dutch auction.

A. auction rate

B. clearing rate

C. interest rate

D. market rate

10. In a Dutch auction, the clearing rate is reset ___.

A. every 7 days

B. every 28 days

C. every 35 days

D. based on whatever is set in the offering circular or official statement

11. In a Dutch auction, bids higher than the clearing rate will be able to buy the bonds.

A. True

B. False

12. Which of the following happens in the case of a failed auction?

(Select all that apply.)

A. There are so many people putting back their bonds but so few people buying them.

B. There is no enough interest that develops in the market.

C. People could not get out of their positions.

D. People hold on to their auction rate securities at the minimum yield that was put in the bond covenant.

13. Which of the following are the risks in auction rate securities?

(Select all that apply.)

A. counterparty risk

B. credit risk

C. marketability risk

D. suitability risk

14. Which of the following is true in a market index-linked CD?

(Select all that apply.)

A. These are CDs with a yield equivalent to a portion of an index.

B. If the market goes up, you will participate equally on how much the upside of the market is.

C. If the market goes down, you are guaranteed that your principal will not fall below par.

D. If the bank issuing the CD goes bankrupt and the CD is not federally insured, you will not get back your principal.

15. If you don’t hold on to a market index-linked CD until maturity, you’re entitled to participate in its upside as long as the CD is FDIC insured.

A. True

B. False

16. Which of the following are risks in a market index-linked CD?

Series 65 Exam Lesson 21 Quiz

This is a Series 65 Exam Lesson 21: a free quiz for Series 65 Exam Lesson 21 Quiz which is covering Money Market. Try it and see how you do if you need help listen to the lesson over.

Series 65 Lesson 21 Quiz

This is a Series 65 Lesson 21 Quiz which is covering Money Market. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

Questions:

Below are questions based on the previous lesson. Choose the letter of the correct answer.

To take the quiz online, click here.

1. Which of the following is an example of a money market instrument?

A. treasury bills

B. commercial paper

C. banker’s acceptance

D. all of the above

2. Money market instruments mature in ___.

A. one year or less

B. two years

C. five years

D. ten years or more

3. This is the only type of banker’s acceptance that the Federal Reserve buys.

A. premium banker’s acceptance

B. primary banker’s acceptance

C. prime banker’s acceptance

D. The Federal Reserve does not accept banker’s acceptance.

4. The price of repurchasing a security include a yield.

A. True

B. False

5. A reverse repurchase agreement is an agreement between two parties where one party agrees to sell a block of securities to another party with the agreement that those securities will be repurchased at a later date at a specific price.

A. True

B. False

6. The shortest repurchase agreement is ___.

A. twelve hours

B. overnight

C. two days

D. five days

7. Which is NOT a characteristic of a repurchase agreement?

A. It has a liquidity risk.

B. It has a purchasing power risk.

C. Its interest rate can change overnight.

D. Its interest rates are very low.

8. The reverse repurchase agreement is used primarily by the ___.

A. Federal Reserve

B. government agencies

C. secondary market

D. all of the above

9. A reverse repurchase agreement is also called a matched sale.

A. True

B. False

10. The Federal Reserve is owned by the government.

A. True

B. False

11. Which of the following does the President of the United States have authority to appoint in the Federal Reserve Board?

A. chairman

B. governors

C. both the chairman and the governor

D. neither the chairman nor the governor

12. The Federal Reserve having “open market operations” means ___.

A. It accepts all kinds of financial instruments.

B. It operates 24 hours a day, 7 days a week.

C. It transacts even with those people outside the member banks.

D. all of the above

13. How does the Federal Reserve create liquidity in the market?

A. It buys fixed-income investments.

B. It sells collateralized debt obligations.

C. It sells fixed-income investments.

D. all of the above

14. What does LIBOR stand for?

A. Leicester Internal Bureau of Reserve

B. Leicester International Bank Open Rate

C. London Interbank Offered Rate

D. London International Bank Official Rate

15. These are funds which a member bank of the Federal Reserve leaves on deposit at the Federal Reserve.

A. Federal Asset

B. Federal Deposits

C. Federal Funds

D. Federal Reserve Account

16. What is the Federal Fund rate?

A. the overnight rate which is the daily average of the rates of most member banks

B. the overnight rate which is the highest accounted rate of the day among the member banks

C. the overnight rate which is the rate of the day of the Federal Reserve

D. the overnight rate which is twice the rate of the day of the loaning bank

17. These are dollar-denominated deposits which are held in a bank branch outside the United States.

A. Eurodollars

B.

Series 65 Exam Lesson 23 Quiz

This is a Series 65 Exam Lesson 23: a free quiz for Series 65 Exam Lesson 23 Quiz which is covering Fixed Income. Try it and see how you do if you need help listen to the lesson over.

Series 65 Lesson 23 Quiz

This is a Series 65 Lesson 23 Quiz which is covering Municipal Debt. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

Questions:

Below are questions based on the previous lesson. Choose the letter of the correct answer.

To take the quiz online, click here.

1. Which is NOT a characteristic of municipal bonds?

A. They are issued by the states, local government, and political subdivisions.

B. They are issued in fully registered or book-entry forms.

C. They do not obtain legal opinion when they are issued.

D. All of the above are characteristics of municipal bonds.

2. How are municipal bonds issued today?

A. They are issued as bearer bonds.

B. They are issued as serial bonds.

C. They are issued both as bearer bonds and serial bonds.

D. They are issued neither as bearer bonds nor serial bonds.

3. The interest on qualified municipal bonds are always exempted from federal tax.

A. True

B. False

4. It is done by a bond counsel who examines the issue to determine if the municipal bond is legally binding on the issuer and that the interest is exempt from federal tax under the current law.

A. constitutional limiting

B. feasibility study

C. legal opinion

D. trust indenture

5. A bond counsel giving a qualified legal opinion says that there may be problems with the issue of the municipal bond such as the exemption from federal tax.

A. True

B. False

6. Which of the following is a municipal bond?

A. moral obligation bond

B. special assessment bond

C. industrial development bond

D. all of the above

7. Which of the following does NOT secure a special tax bond?

A. ad valorem tax

B. cigarette tax

C. gasoline tax

D. liquor tax

8. The issuance of this bond is backed up by a revenue source (other than an ad valorem tax or property tax) and by the full faith and credit of the taxing authority.

A. double-barreled bond

B. general obligation bond

C. limited tax bond

D. Public Housing Authority bond

9. Short-term municipal notes have a life of less than twelve months up to three years.

A. True

B. False

10. These notes are issued at the end of the year and the taxes received at the beginning of the year will be used to pay off the issued notes.

A. grant anticipation notes

B. revenue anticipation notes

C. tax anticipation notes

D. tax exempt commercial paper

11. Step up or step down variable interest notes have interest rate that goes up or down and keeps the value of the bond basically at par.

A. True

B. False

12. Which of the following does NOT contribute to a state’s income?

A. income tax

B. real property tax

C. sales tax

D. All of the above contribute to a state’s income.

13. Which of the following is NOT a characteristic of a general obligation bond?

A. It carries the full faith and credit of the issuing municipality.

B. It carries the highest ratings and therefore the highest yield.

C. It is serviced by ad valorem taxes.

D. All of the above are characteristics of a general obligation bond.

14. Which of the following is NOT a revenue bond?

A. hospital bond

B. sewer bond

C. special assessment bond

D. water bond

15. These are used for the protection of the investor in the bonds.

A. deed covenant

B. nondiscrimination covenant

C. protective covenant

D. revenue pledge covenant

16. The element of a municipal bond that allows,

Series 65 Exam Lesson 20 Quiz

This is a Series 65 Exam Lesson 20 Quiz, Exam Lesson 20 Free Quiz which is covering Fixed Income. Try it and see how you do if you need help listen to the lesson over.

Series 65 Lesson 20 Quiz

This is a Series 65 Lesson 20 Quiz which is covering Fixed Income. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

Questions:

Below are questions based on the previous lesson. Choose the letter of the correct answer.

To take the quiz online, click here.

1. The US government is not subject to the Securities Act of 1933.

A. True

B. False

2. Which of the following are non-callable?

A. treasury notes

B. treasury bonds

C. treasury bills

D. all of the above

3. A risk free investment guarantees a client to get back a dollar for every dollar he invests as long as he does it at par.

A. True

B. False

4. Which of the following is a risk-free investment?

A. Collateralized Mortgage Obligations

B. treasury bills

C. zero coupon bond

D. all of the above

5. Interest on direct US treasuries are exempted from ___.

A. federal taxation

B. state taxation

C. both federal taxation and state taxation

D. neither federal taxation nor state taxation

6. Which of the following is NOT a characteristic of US government bonds?

A. Their auctions are held every six months.

B. Their interest is paid semiannually.

C. They are callable.

D. They are the longest issued bonds.

7. Interest rates of Treasury Inflation Protected Securities are usually lower than treasury notes or treasury bonds because of the ___.

A. coupon rate

B. inflation protection

C. state taxation

D. all of the above

8. Which of the following is NOT a quasi-hybrid security?

A. Certificates of Accrual on Treasury Securities (CATS)

B. Separate Trading of Registered Interest and Principal Securities (STRIPS)

C. Treasury Income Growth Receipts (TIGERS)

D. All of the above are quasi-hybrid securities.

9. It is an independent federal agency created as a successor regulatory agency from the merger of the Federal Housing Finance Board, the Office of Federal Housing Enterprise Oversight and the US Department of Housing and Urban Development.

A. Federal Home Loan Agency

B. Federal Housing Finance Agency

C. Federal Intermediate Credit Agency

D. Federal Land Agency

Series 65 Exam Lesson 20 Quiz: Fixed Income 3: Continued

10. The only US government agency obligation that carries the full faith and credit of the United States government

A. Farmers Housing Administration

B. Government National Mortgage Association

C. Small Business Administration

D. Student Loan Marketing Association

11. Which of the following is NOT guaranteed in a Ginnie Mae certificate?

A. duration of the investment

B. interest rate

C. principal

D. All of the above are guaranteed in a Ginnie Mae certificate.

12. Why does the investment value of a Collateralized Mortgage Obligation decline in a client’s statement?

A. The interest rate goes down making the investment value decrease.

B. The principal is adjusted based on the current inflation rate.

C. The reduction in the investment value is received by the client every month as part of the principal.

D. all of the above

13. Zero coupon bonds are created by the government.

A. True

B. False

14. These are government notes or government bonds whose interest payments are stripped out and then sold at a discount.

A. serial bonds

B. treasury bills

C. treasury bonds

D. zero coupon bonds

15. If a client owns a 20-year zero coupon treasury bond and interest rates go up,

Series 65 Exam Lesson 19 Quiz

This is a Series 65 Exam Lesson 19 Quiz, Exam Lesson 19 Free Quiz which is covering Fixed Income. Try it and see how you do if you need help listen to the lesson over.

Series 65 Lesson 19 Quiz

This is a Series 65 Lesson 19 Quiz which is covering Fixed Income. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

Questions:

1. Which of the following is the correct set of government bills in order of increasing length in which they are set?

A. bills, notes, bonds

B. notes, bonds, bills

C. bonds, notes, bills

D. All of the above government bills have equal duration in which they are set.

2. Which of the following is NOT a US government sponsored entity?

A. Fannie Mae

B. Freddie Mac

C. Ginnie Mae

D. Sallie Mac

3. A call feature is a compulsory redemption of the bond at a specific price.

A. True

B. False

4. A call protection period is _____.

A. a period of time which protects the bond holder from an increase in the interest rate

B. a period of time which protects the bond holder from a decrease in the dividend

C. a period of time which protects the bond holder from a call from the issuer

D. a period of time which protects the bond holder from a call from the transfer agent

5. It is best to quote a bond to a client in the most conservative yield.

A. True

B. False

6. It is the right of the bond holder to redeem the bond from the issuer on a specific date.

A. call feature

B. put feature

C. tending feature

D. refund feature

7. US treasury bonds are quoted in ___.

A. eighths

B. sixteenths

C. thirty-seconds

D. sixty-fourths

8. Corporate bonds are quoted in ___.

A. eighths

B. sixteenths

C. thirty-seconds

D. sixty-fourths

9. Bonds that trade flat are bonds without accrued interest.

A. True

B. False

10. Which of the following is a bond that trade flat?

A. defaulted bond

B. commercial paper

C. zero coupon bond

D. all of the above

Series 65 Exam Lesson 19 Quiz: Fixed Income 2: Continued

11. A basis point is 10th of a percentage point.

A. True

B. False

12. In calculating the price of a serial bond, the following are needed EXCEPT ___.

A. call date

B. maturity date

C. settlement date

D. yield basis quote

13. In corporate bonds, in the event of dissolution, which of the following is the correct set of obligation in order of decreasing priority?

A. preferred stockholders  secured creditors  debentures  unpaid wages, taxes, trade creditors

B. secured creditors  preferred stockholders  debentures  unpaid wages, taxes, trade creditors

C. secured creditors  unpaid wages, taxes, trade creditors  debentures  preferred stockholders

D. unpaid wages, taxes, trade creditors  debentures  secured creditors  preferred stockholders

14. The Trust Indenture Act of 1939 includes which of the following?

A. the terms of the issuance of bond

B. specific protections for the bondholders

C. important information for the full disclosure of the terms of that bond offering

D. all of the above

15. All of the following are secured debts EXCEPT ___.

A. debentures

B. equipment trust certificates

C. mortgage bonds

D. All of the above are secured debts.

16. Which of the following is NOT a characteristic of a commercial paper?

A. It is registered in the Securities and Exchange Commission.

B. It is usually in very large denominations.

C. It is usually issued at a discount.

D. Its maturity does not exceed 270 days.

17. It gives the bond holder the option of converting his debt in common stock at a set conversion ratio.

A.

Series 65 Exam Lesson 18 Quiz

This is a Series 65 Exam Lesson 18 Quiz, Exam Lesson 18 Free Quiz which is covering Fixed Income. Try it and see how you do if you need help listen to the lesson over.

Series 65 Lesson 18 Quiz

This is a Series 65 Lesson 18 Quiz which is covering Fixed Income. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

Questions:

1. Which of the following is an example of a fixed income investment?

A. bond

B. government note

C. collateralized mortgage obligations

D. all of the above

2. In fixed income investments, the par value ___.

A. is greater than the maturity value

B. is less than the maturity value

C. is equal to the maturity value

D. varies with the maturity value but with no general trend

3. Maturity value is the value the investor gets when his fixed income investment matures.

A. True

B. False

4. This is the date when the investor gets back the par value of his fixed income investment.

A. call date

B. declaration date

C. maturity date

D. payable date

5. Fixed income investments have stated interest rates except for ___.

A. serial bonds

B. series bonds

C. term bonds

D. zero coupon bonds

6. US government bonds have no call features.

A. True

B. False

7. Sinking funds are ___.

A. bonds that have depreciated its par value

B. a portion of money set aside every year to buy back the issued bonds

C. the difference between the bond’s par value and the yield of maturity

D. all of the above

8. Which of the following is associated with collateralized mortgage obligations?

A. Ginnie Mae

B. government bill

C. sinking funds

D. all of the above

9. These bonds are bought at a discount and mature at par value.

A. serial bonds

B. series bonds

C. term bonds

D. zero coupon bonds

10. These are bonds that have varying maturity dates that carry different interest rates.

A. serial bonds

B. series bonds

C. term bonds

D. zero coupon bonds

Series 65 Exam Lesson 18 Quiz: Fixed Income 1: Continued

11. Which of the following does a zero coupon bond have?

A. interest rate

B. interest payment date

C. discount

D. all of the above

12. Which of the following does a term bond have?

A. interest rate

B. interest payment date

C. maturity date

D. all of the above

13. In a zero coupon bond, the difference between the value of the bond when it is bought and the value of the bond when it matures is the calculated yield.

A. True

B. False

14. Serial bonds are issued in a series of steps according to the cash needs of the issuer.

A. True

B. False

15. In the normal yield curve environment, ___.

A. the shorter the maturity on a fixed income investment, the lower the par value

B. the shorter the maturity on a fixed income investment, the higher the par value

C. the shorter the maturity on a fixed income investment, the lower the yield

D. the shorter the maturity on a fixed income investment, the higher the yield

16. In an inverted yield curve, ___.

A. the shorter the maturity on a fixed income investment, the lower the par value

B. the shorter the maturity on a fixed income investment, the higher the par value

C. the shorter the maturity on a fixed income investment, the lower the yield

D. the shorter the maturity on a fixed income investment, the higher the yield

17. When buying a discounted bond in the secondary market, which of the following is the correct set of yield in order of increasing value?

A. coupon yield, current yield, yield to maturity

B. yield to maturity, coupon yield, current yield

C. current yield,

Series 65 Exam Lesson 17 Quiz

This is a Series 65 Exam Lesson 17 Quiz, Exam Lesson 17 Free Quiz which is covering Special Securities. Try it and see how you do if you need help listen to the lesson over.

Series 65 Lesson 17 Quiz

This is a Series 65 Lesson 17 Quiz which is covering Preferred Stocks. Try it and see how you do if you need help listen to the lesson over.

Questions covered include

Questions:

1. These are rights to purchase stock at specific prices that are long-term in nature.

A. purchasing rights

B. preemptive rights

C. option rights

D. warrants

2. To which of the following can warrants be attached to?

A. sale of a common stock

B. sale of a preferred stock

C. sale of a bond

D. all of the above

3. Warrants can be traded but they should be traded along with the stock or bond that comes with them.

A. True

B. False

4. The value of the warrant is based on the ___ that it is tied to.

A. stock

B. dividend of the stock

C. interest rate of the stock

D. par value of the stock

5. Warrants allow trading foreign stocks on the US markets.

A. True

B. False

6. Rights to buy a new stock come about as a result of ___.

A. preemptive rights

B. purchasing rights

C. voting rights

D. warrants

7. How are warrants and rights similar?

A. Both warrants and rights are traded separately from the stock that they are attached to.

B. They both serve as enticement to buy stocks.

C. They are both special securities.

D. all of the above

8. How are warrants and rights different?

A. Warrants are short term in nature while rights are long term in nature.

B. Warrants are long term in nature while rights are short term in nature.

C. Warrants are attached to stocks while rights are not attached to stocks.

D. Rights are attached to stocks while warrants are not attached to stocks.

9. The warrant can be exercised immediately after the issuance of the bond or stock that is attached to it.

A. True

B. False

10. All warrants have expiration dates.

A. True

B. False

Series 65 Exam Lesson 17 Quiz: Special Securities Continued

11. Why would companies issue warrants?

A. It would lower their tax.

B. It would increase the stock price at the secondary market.

C. It would increase their ability to issue a secondary offering of stocks at a slightly higher price.

D. all of the above

12. In order for a warrant to have an intrinsic value, ___.

A. The warrant must have a price equal to the price of the stock it is attached to.

B. The warrant must have a price higher than the price of the stock it is attached to.

C. The warrant must have a price lower than the price of the stock it is attached to.

D. The warrant must have a constant price regardless of the price of the stock it is attached to.

13. This is a negotiable security that represents securities of a non-U.S. company that trades in the U.S. financial markets.

A. bond

B. right

C. ADR

D. warrant

14. What does ADR stand for?

A. American Dividend Receipts

B. American Differential Receipts

C. American Development Receipts

D. American Depository Receipts

15. The dividends of the ADR are paid ___.

A. in US currency only

B. only in the currency of the country of the investor who bought the ADR

C. in either US currency or the investor’s country currency, whichever has the lower dividend after currency conversion

D. in any currency that the bank offers where the dividend is claimed

16. Non-sponsored ADRs are assembled by banks and brokers without the participation of the issuer of the stock.

A. True

B. False

17. How does the sponsored ADRs and non-sponsored ADRs differ?