Chapter 6 Practice Questions
1. For which of the following would you not receive a certificate?
A. Bearer bond
B. Partially registered bond
C. Fully registered bond
D. Book-entry bond
2. Which type of bond is typically held in street name?
A. Bearer bond
B. Partially registered bond
C. Fully registered bond
D. Book-entry bond
3. Reclamation refers to:
A. A claim for the right to return or to demand the return of a security after it has been previously accepted
B. A transaction to purchase a security after having sold the same security within the past 30 calendar days
C. The ability of an underwriter to reclaim part of the price of a security from a dealer if it is flipped
D. The ability of an underwriter to buy up unsold shares in a new issue
4. Securities certificates must be delivered with _____ unless identified as ex legal at the time of the trade.
A. A form letter
B. Legal opinions
C. Insurance
D. A preliminary prospectus
5. 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.
6. Which of the following does not need to be shown on a customer trade confirmation for a tax-free municipal security?
A. Whether the dealer acted as an agent or principal to the transaction
B. A designation that the securities are tax exempt at the federal level
C. The total amount of the transaction along with the accrued interest
D. Calculated yield
7. 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. GO bonds
8. Which of the fo