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 keep all books and records:
A. In an adequate, climate-controlled facili