Progressive Greenlight Checkup Practice Exam

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• What is it called when a broker-dealer contacts another broker-dealer to buy OTC stock, instead of buying it directly from a market maker?
• Which of the following investment options typically offers the highest potential return?
• Understanding a customer's investment profile is crucial for determining:
• What is a sales breakpoint in the context of mutual funds?
• Under what circumstances can both a husband and wife serve as custodians for one minor's account?
• Under which circumstance can a client redeem their IRA investments tax-free?
• What is the primary risk associated with long-term bond investments, such as 20-year Treasury bonds?
• On what is the payout of a variable annuity based?
• What is a benefit of purchasing a call option for an investor?
• What kind of payments does an investor receive from Treasury notes?
• Which of the following entities is not subject to the Investment Company Act of 1940?
• The value fluctuations of a variable annuity are linked to which of the following?
• What document is required when a corporation wishes to open a cash account?
• When do listed equity options cease trading?
• In which situation can a registered person of a broker-dealer borrow funds from a customer without firm approval?
• If a bond has a 6% coupon and is trading with an 8.34% basis, how is it priced in the market?
• Which statement is NOT TRUE regarding private securities transactions executed by an associated person of a member firm?
• What risk is a principal of a broker-dealer primarily responsible for regarding communications?
• What characterizes a variable-rate demand obligation in terms of investor rights before maturity?
• What is the greatest risk associated with mortgage-backed securities?
• In terms of mutual fund purchases, what typically happens at a breakpoint?
• How may a 529 plan be offered?
• What essential information must be included on Form U5?
• What is a security that pays a fixed amount quarterly and allows profit if common stock rises?
• How long must a broker-dealer continue to deliver prospectuses for an IPO after the deal has closed?
• What risks are exchange-traded notes most susceptible to?
• A brokerage firm may create an in-house, non-cash incentive program if it is tied to the sale of which products?
• In a 529 plan, can an individual be both the donor and the beneficiary?
• An IRA that allows for non-deductible contributions and provides tax-free qualified distributions after age 59 1/2 is known as what?
• What is the primary difference between Class A shares and Class B shares of a mutual fund?
• What do best execution rules require broker-dealers to do when executing customer orders?
• Who would most likely use repurchase agreements (repos) and reverse repos?
• If a bond sells for less than its par value, what can be said about its current yield?
• A customer executing a short sale anticipates what market condition?
• Why do many investors prefer the straight-life payout option for variable annuity payments?
• Which of the following statements is NOT TRUE concerning the opening of an account for a new client?
• Which organization regulates blue-sky laws?
• Which statement is TRUE for a bond trading at par?
• Foremost Corporation has declared a quarterly dividend of 25 cents. When will the dividend be paid to stockholders of record?
• In a scenario where a registered person sells partnership units not through their broker-dealer, which statement is TRUE?
• Disciplinary actions concerning a registered representative are reported through which form?
• Which activity is acceptable during the cooling-off period?
• Which statement is true concerning the responsibilities of a principal of a broker-dealer?
• Which person within a brokerage firm is NOT required to be fingerprinted?
• Which yield would be MOST relevant for a bond issuer with the ability to redeem the entire issue prior to the final maturity date?
• Broker-dealers must provide a privacy notice to every consumer at what point?
• Which type of security is exempt from state taxes?
• In a limited partnership, under what condition could a limited partner lose her limited liability?
• Which statement is TRUE regarding a complaint received by a registered person from a customer?
• Which of the following investors typically are entitled to vote?
• Which statement regarding exchange-traded funds (ETFs) is accurate?
• What type of risk is considered the premium paid for an option?
• During a recession with low inflation, what action is the Federal Reserve likely to take?
• A person with a prior conviction for counterfeiting seeking employment in investment banking is?
• Which type of communication is considered misleading according to FINRA's rules?
• What is TRUE regarding a person who has an online brokerage account but has just been hired by a broker-dealer?
• Which of the following is NOT a characteristic of preferred stock?
• Which financial instrument is considered a low-risk investment option?
• What does 'market risk' refer to in investing?
• Which factor is considered least important in evaluating a stock investment?
• What is the main purpose of the Securities Act of 1933?
• What is true about a security with a high beta?
• What is the real interest rate for a bond yielding 6% with an inflation level of 2%?
• Under what circumstance can an individual withdraw from an IRA prior to age 59 1/2 without incurring a 10% penalty tax?
• Three-month and six-month Treasury bills are auctioned by which entity?
• A registered person receiving a $150 gift from a FINRA member firm considers the gift to be?
• Which of the following statements is NOT true for a bond trading at a premium?
• What financial practice is associated with matched sales?
• Before the maturity of a variable-rate demand obligation, an investor is entitled to receive what?
• Which interest rate is known to fluctuate the most among various rates?
• If an employee agrees to pay for dinner with another firm's employee without attending, how is this viewed?
• What type of risk is the most significant for a thinly traded stock with no trading activity?
• In which capacity does ABC Brokerage act when purchasing shares from a market maker to fill a customer's buy order?
• In the context of financial markets, what does 'liquidity' refer to?
• What is the current yield of a $1,000 par value bond with a 5% coupon selling for $800?
• If an investor buys 1 XYZ Aug 40 put for $5 and also purchases 100 shares of XYZ at $40 each, what is her breakeven point?
• An investor holding 20-year Treasury bonds is primarily exposed to which type of risk?
• According to the Customer Identification Program, how quickly must broker-dealers verify each customer's identity?
• What is the name of the strategy when a portfolio manager moves client funds from one industry to another during certain market periods?
• Which of the following activities is NOT performed by a transfer agent?
• What does a put option allow the holder to do?
• If interest rates decline, which of the following securities is likely to have the greatest increase in market value?
• Which federal securities regulation requires disclosure by issuers offering securities to the public?
• If a project financed through revenue bonds is failing to meet debt service payments, it is most likely categorized as what type of bonds?
• A call premium is best described as the amount the:
• What is the transaction cost paid by the client when an ETF is purchased?
• How is a variable annuity typically characterized?
• FINRA requires a registered representative to notify his broker-dealer if he is involved in which of the following activities?
• A reverse repurchase agreement is sometimes referred to as what?
• What is the main difference between a registered exchange-traded REIT and a registered nontraded REIT?
• For how long is a broker-dealer restricted from engaging in negotiated underwritings with a city if a member financial professional contributes to a friend running for treasurer?
• A corporation that has issued common or preferred stock has created what type of financial instrument?
• What is the minimum participation in profits and losses for a general partner in a limited partnership?
• What characteristic is shared by both fixed and variable annuities?
• Which organization is responsible for updating state securities laws?
• In context of corporate bonds, a secured bond is backed by:
• What is the MOST appropriate action for an Operations Professional upon receiving a customer complaint that has been rectified?
• What is the interest rate charged on loans between member banks of the Federal Reserve called?
• In the context of ethics, how is paying for dinner without attending regarded?
• What factor typically influences investment suitability for customers?
• Which is the rate that commercial banks charge on loans to broker-dealers for margin purposes?
• Which type of risk is NOT classified as unsystematic risk?
• Which statement is TRUE regarding Real Estate Investment Trusts (REITs)?
• A Regulation D offering may be sold to a maximum of how many nonaccredited investors?
• If an investor aged 52 wishes to transfer funds from a 401(k) plan to an IRA account, what is a relevant statement?
• What is the rate charged on overnight loans between commercial banks known as?
• Which of the following will reduce sales charges?
• Municipal bonds backed by the taxing power of the issuer are referred to as?
• Can a brokerage firm place a temporary hold on the transfer of securities?
• What do low expense ratios in mutual funds primarily indicate?
• Which of the following is NOT included in a list of institutional investors?
• Which of the following statements is NOT TRUE about a company's Form 10-K?
• What does a high current ratio indicate about a company?
• Which of the following best describes the role of a broker-dealer?
• How do Class A shares differ from Class B shares in an open-end investment company?
• What is a potential consequence of providing misleading sales literature according to FINRA?
• It is most beneficial for the holder of a call option if the price of the underlying security is:
• If a broker-dealer executes but does not process transactions, and the processing firm knows the customers' identities, what is this arrangement known as?
• A 529A of an ABLE account permits which of the following benefits?
• For a buyer of an option, what does the premium paid represent?
• An investor with bonds yielding 6% is facing lower yields due to decreasing interest rates. What risk is this investor experiencing?
• What is a key benefit of a 529 plan for college education investments?
• What should a registered representative do upon receiving a written complaint from a customer?
• What is the consequence for an individual convicted of insider trading seeking to become a registered representative?
• Who is liable if someone uses insider information received from a company board member?
• What documentation must firms use to report actions taken against a registered representative?
• Which of the following is an exception to federal and state registration requirements?
• Which statement is true regarding revenue bonds?
• If an investor inherits mutual fund shares, what is her cost basis?
• What advantage do investors gain by placing a sell limit order?
• Which type of economic indicator is industrial production considered?
• Why might a bond trade at a discount?
• What differentiates the Settlement date from the Regulation T payment date?
• Which of the following statements about Regulation T is correct?
• Which of the following is a characteristic of direct participation programs (DPPs)?
• If a corporation has cumulative preferred stock and has paid dividends of $5, $6, and $7 in the previous three years, what must they pay in 2012 before issuing common stock dividends?
• Which choice helps the U.S. balance of payments?
• When a bond offering is issued with a put provision, who benefits the most?
• What is a common characteristic of moral obligation bonds?
• What type of risk is associated with a stock that is not widely traded?
• If a firm places a temporary hold on a customer's account, what does it apply to?
• Which type of investment offers tax benefits and allows an individual to share directly in the earnings of the business?
• In what type of offering are all of the proceeds directed to the issuer?
• What is a common feature of exchange-traded funds (ETFs)?
• Is a brokerage firm allowed to place a temporary hold on a securities transaction?
• What type of account arrangement allows a broker-dealer to know the identity of the customer while executing but not processing transactions?
• Which type of change does NOT require a broker-dealer to send a notice to the customer?
• What is the primary role of the Securities and Exchange Commission (SEC)?
• If an investor's portfolio is significantly weighted with mortgage-backed securities, she is MOST concerned with?
• If a client wants to sell her stock only if it reaches $54.00 or higher, what type of order should she place?
• Blue Sky laws are established under which act?
• If a mutual fund has a breakpoint at $100,000, which scenario qualifies as a breakpoint sale?
• What must a newly hired person do to become FINRA registered if offering mutual fund shares?
• The practice of selling dividends is prohibited because:
• What does a brokerage firm generally provide to its employees regarding investment opportunities?
• What is the general outcome of a dollar-cost averaging investment strategy?
• Under ERISA, what is the minimum working requirement for employees to be included in qualified plans?
• An investor purchases 1,000 shares of ABC stock at $30 per share and receives an annual dividend of $1.20. After one year, the stock's market value increases to $36 per share. What is the total return for the investor?
• When assessing a mutual fund, which share class is associated with a front-end sales charge?
• If a registered representative suspects financial exploitation of an account holder, what is the best action to take?
• Given a mutual fund with a NAV of $11.72 and an offering price of $12.67, what is the sales charge percentage?
• Which of the following represents a key role of transfer agents?
• What is the regular-way settlement date for a U.S. Treasury bill sold in the secondary market on Thursday, March 14?
• What is the primary purpose of a General Obligation bond?
• When a broker-dealer makes securities transactions on behalf of others rather than for its own account, the firm is acting as a(n):
• Funds collected from 12b-1 fees cannot be used for which of the following expenses?
• Which one of the following persons is permitted to purchase an equity IPO in her personal account?
• When selling a security for a customer, which item is NOT required to be included on the sell order ticket?
• What happens to a company's common stock when its convertible bonds are converted by bondholders?
• Which characteristic is true about preferred stock?
• What is typically completed prior to determining whether to issue a revenue bond?
• If a corporation declares a 5% stock dividend payable on October 18, what is the ex-date for this distribution?
• Setting up a non-cash incentive program requires compliance with which regulatory aspect?
• Which entity maintains a record of the shareholders that are eligible to receive additional shares after a stock split?
• How many basis points are equivalent to three basis points?
• All of the following are features of a Roth IRA, EXCEPT?
• A temporary hold on a customer’s account must be justified under which conditions?
• A type of offering where the issuing corporation is guaranteed to receive the full amount while the underwriter retains any unsold shares is known as what?
• For how many successive quarters must GDP fall for the economy to be considered in recession?
• What is a common reason for an investor to diversify their portfolio?
• If a person fails a qualification exam on their third attempt, how long must they wait before they can retake the same exam?
• When referring to preferred shares, what is a distinguishing feature typically associated with them?
• When can a European style option be exercised?
• What is the total sales charge for a purchase of $75,000 in a mutual fund with a 5.50% front-end load?
• Regarding the Uniform Gifts to Minors Act, which statement is NOT true?
• Which of the following is TRUE concerning the beneficiary of a Coverdell ESA?
• For a person with a variable life insurance policy, which risk is of greatest concern?
• A rise in the prices of several key goods and services is typically an indicator of:
• In insider trading cases, who might be liable if a tipper shares confidential information?
• Under the New Issue Rule, all of the following persons are defined as restricted persons, EXCEPT:
• Which of the following is the BEST description of inflation?
• Why do no-load mutual funds have lower expense ratios compared to mutual funds with a sales load?
• What is a true statement regarding the filing of a registration application with FINRA?
• The net asset value (NAV) of an open-end investment company is $22.20 and its sales charge is 8%. What is the public offering price?
• Which U.S. government agency is responsible for regulating the process of capital raising by issuers?
• Which statement correctly distinguishes between warrants and rights?
• What is the primary purpose of a put option in trading?
• Which of these statements best describes a firm commitment offering?
• A corporate bond that lacks specific collateral backing yet is guaranteed by the issuing corporation's overall creditworthiness is known as a(n):