Chapter 7 Practice Questions
- 1. 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 it 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.
- 2. Which of the following municipal securities needs to list the yield on the customer trade confirmation?
- A. Variable rate securities
- B. Bonds in default
- C. Municipal fund securities
- D. Build America Bonds
- 3. Which of the following would not be required on a trade confirmation for a when-issued municipal security?
- I. Name of the customer and whether the customer is a purchaser or seller
- II. Whether the dealer is acting as principal or agent and whether it is agent for the customer, another entity, or both
- III. Yield
- IV. Settlement date
- A. I and IV
- B. I and III
- C. III and IV
- D. II and III
- 4. For municipal securities, dealers must send trade confirmations to their customers for:
- A. Agency transactions only
- B. Principal transactions only
- C. Both principal and agency transactions
- D. Neither agency nor principal transactions
- 5. For municipal securities, which of the following parties may take exception to a transfer instruction?
- A. The customer
- B. The carrying party
- C. The receiving party
- D. The transfer agent
- 6. All of the following records must be maintained by a dealer for life except:
- A. Stock certificate books
- B. General ledgers and customer ledgers
- C. Minute books of board or partnership meetings
- D. All partnership articles, articles of incorporation, or charters
- 7. Dealers must kee