Series 52: Chapter 4 Practice Questions

Chapter 4 Practice Questions

1. 1. Municipal bonds pay interest every:
2. A. Month
3. B. Three months
4. C. Six months
5. D. Year
6. 2. Accrued interest for municipal bonds is calculated based on the assumption that a year has:
7. A. 360 days
8. B. 365 days
9. C. 366 days
10. D. 372 days
11. 3. A firm quote for a municipal security is a quote that:
12. A. Will not change for at least five minutes after publication
13. B. Is only made available to other broker-dealers
14. C. The dealer is ready to buy or sell at
15. D. Does not lock or cross any other quotes
16. 4. Trade A and Trade B occur on the same day. Trade A is a cash settlement trade, and Trade B settles via regular way settlement. Both trades are for municipal bonds. Trade B will settle:
17. A. Three business days after Trade A
18. B. Two business days after Trade A
19. C. One business day after Trade A
20. D. Two business days before Trade A
21. 5. The date when interest starts accruing on purchased municipal bonds is known as the:
22. A. Record date
23. B. Dated date
24. C. Ex-date
25. D. Declaration date
26. 6. The underwriting period on a municipal bond offering ends:
27. A. At the closing date
28. B. When the entire issue has been sold to the public
29. C. At the earlier of the closing date and when the entire issue has been sold to the public
30. D. At the later of the closing date and when the entire issue has been sold to the public
31. 7. Which of the following securities would subject the issuer to the greatest amount of interest rate risk?
32. A. Original issue discount bonds
33. B. Variable rate securities
34. C. Revenue anticipation notes
35. D. Taxable municipal bonds
36. 8. A municipal securities trade occurs on Friday, May 12. Assuming there are no intervening holidays, regular way settlement would occur on:
37. A. May 15
38. B. May 16
39. C. May 17
40. D. May 1