Chapter One Practice Questions
1. All of the following are exempted securities except:
A. Ginnie Mae mortgage-backed securities
B. American Depository Receipts (ADRs)
C. Municipal bonds
D. U.S. Treasury bills
2. All of the following are true of the Securities Act of 1933 except:
A. One of its purposes is to prohibit fraud and deceit in the marketing of securities.
B. It requires that all securities are registered with the federal government prior to offering them for sale.
C. The Act requires that a company’s financial statements are certified by independent accountants.
D. It regulates how securities are issued and first sold to the public.
3. Which of the following is not covered under the scope of the Securities Exchange Act of 1934?
A. The regulation of how securities are registered, issued, and distributed to the public for the first time
B. The requirement that all broker-dealers must be registered
C. The regulation of the secondary market, including the financial markets and market participants
D. The establishment of the SEC
4. All of the following statements about FINRA are correct except:
A. FINRA establishes and interprets the rules that govern the secondary markets.
B. All non-bank dealers that do business in the securities industry must register with FINRA.
C. FINRA does not have authority over those that deal only in exempt securities.
D. FINRA is a national securities association that is not required to register with the SEC.
5. Which of the following are true?
I. Municipal advisors may, under certain circumstances, act as underwriters.
II. Underwriters may, under certain circumstances, act as municipal advisors.
III. Municipal advisors may never act as underwriters.
IV. Underwriters may never act as municipal advisors.
A. I and IV
B. II and III
C. I and II
D. III and IV
6. Which of the following is true of the MSRB?
A. The MSRB creates rules that govern iss