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Bubba has a short margin account with equity of $15,000 and a credit balance of $28,000.

What is th e current NYSE minimum equity maintenance requirement on Bubba’s account?

A.

$3,900

B.

$4,500

C.

$3,250

D.

$3,750

Bubba buys a US treasury bond. The interest he earns is:

A.

subject to federal and state income tax

B.

exempt from federal and state income tax

C.

subject to state income tax but exempt from federal income tax

D.

subject to federal income tax but exempt from state income tax

Bubba buys one XYZ June 40 call for $1,000 and sells one XYZ March 40 call for $600. Subsequently, the June call is closed for $1,200 and the March call for $900.

What is Bubba’s net result?

A.

$100 loss

B.

$100 profit

C.

$200 loss

D.

$200 profit

What percentage of maintenance charges and debt service are covered by the rate covenant of a revenue bond issued to finance a municipal toll road?

A.

75%

B.

100%

C.

120%

D.

150%

A call option is in the money when the market value of the underlying stock is:

A.

lower than the strike price of the option

B.

the same as the strike price of the option

C.

higher than the strike price of the option

D.

higher than the strike price plus the premium

In the offering of new securities, members of the syndicate are permitted to sell to other dealers less the reallowance. The amount of the reallowance is determined by:

A.

the FINRA

B.

the issuing corporation

C.

the syndicate manager

D.

the SEC

Provisions of SEC Rule 145 normally apply to an exchange of one security for another as a result of:

A.

a stock split

B.

a change in par value

C.

a merger

D.

a “no-sale” ruling issued by the SEC

Bubba opens a new account with a broker/dealer and asks for a copy of the firm’s financial statement. If the firm has not been subject to a formal audit by an independent public accountant for quite some time, what should it do in response to the request?

A.

give Bubba its latest available statement

B.

wait until after the next audit is completed before providing a statement to Bubba

C.

delay sending a statement until Bubba has had an account with the firm for at least six months

D.

refuse to provide a financial statement

Which of the following would not normally be a function of an investment banker?

A.

providing short-term capital needs to client companies

B.

underwriting new issues of securities

C.

providing long-term capital needs to client companies

D.

assisting in large secondary offerings of securities

In regard to discretionary accounts, which of the following statements is correct?

A.

the customer must approve each transaction in writing before the order is entered

B.

the customer must grant written authorization to the member firm to exercise discretion in the account

C.

the account must be accepted in writing by an officer of the member firm

D.

both B and C