Series 52

Study Question of the Week: May 14, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 51, Series 52, Series 53, Series 62, Series 79, Series 82, and Series 99. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 7, Series 51, Series 52, Series 53, Series 62, Series 79, Series 82, and Series 99):

Why would a bond issuer decide to issue an advance refunding bond?

Answers:

A. Because interest rates have risen

B. To lock into the current lower interest rates

C. Because the CPI has gone up

D. To try to increase the yield on their bond issue

Correct Answer: B. To lock into the current lower interest rates

Rationale: A bond refunding is the replacement of existing bonds with new “refunding“ bonds. The issuer of refunding bonds seeks to lower its interest payments by paying off its previously issued (refunded) bonds with newly issued bonds that pay a lower interest rate. An advance refunding bond refers to one in which more than 90 days must elapse before the refunded bond can be retired. An issuer typically uses advance refunding when interest rates have dropped significantly, but the next call date is not in the near future. An advance refunding bond allows the issuer to lock in the lower interest rates now without risking that they rise before the call date arrives.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: May 7, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 52, Series 62, Series 65, and Series 66. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 52, Series 62, Series 65, and Series 66):

Concerning municipal bonds issued by the city of Baltimore, Maryland:

Answers:

A. If you live in the state of Maryland, you will pay state tax on the interest you earn

B. If you live in the state of Virginia, you will not pay state tax on the interest you earn

C. If you live in the state of Maryland, you will pay federal capital gains tax on any profits you realize when you sell the bonds

D. If you live in the state of Virginia, you will not pay federal capital gains tax on any profits you realize when you sell the bonds

Correct Answer: C. If you live in the state of Maryland, you will pay federal capital gains tax on any profits you realize when you sell the bonds

Rationale: Interest income earned on municipal bonds is not taxable at the federal level, and only taxable at the state level outside the state of their issuance. Capital gains realized upon the sale of such bonds are subject to capital gains tax regardless of the taxpayer’s state of residence.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: April 9, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 24, Series 26, Series 52, Series 53, Series 66, Series 79, and Series 99. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 24, Series 26, Series 52, Series 53, Series 66, Series 79, and Series 99):

Which of the following are correct dollar minimums for the Bank Secrecy Act’s requirements for broker-dealers?

I. $3,000 or more received or transmitted must be recorded in a monetary instrument log (MIL)

II. $5,000 or more received or transmitted must be recorded in a monetary instrument log (MIL)

III. Cash transaction of $5,000 or more must be reported to the IRS

IV. Cash transaction of $10,000 or more must be reported to the IRS

Answers:

A. I and III

B. I and IV

C. II and III

D. II and IV

Correct Answer: B. I and IV

Rationale: In any one day, a transmittal of $3,000 or more or a cash transaction must be recorded in a monetary instrument log (MIL) and cash transaction of $10,000 or more must be reported to the IRS.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: March 26, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 51, Series 52, Series 53, and Series 99. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 7, Series 51, Series 52, Series 53, and Series 99):

Sam, an agent, is passionate about politics. He lives in State A and works in State B. He wants to contribute money to some campaigns for public office in each state, but is also hoping to engage in municipal securities business with each state. Where can Sam make contributions?

Answers:

A. State A only

B. State B only

C. State A and State B

D. Neither State A nor State B

Correct Answer: A. State A only

Rationale: Agents are allowed to make contributions to candidates that they could vote for, up to $250 per election. Contributions to other candidates would result in bans from doing municipal securities business with the municipal issuer where the candidate is running for office.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: February 5, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 24, Series 26, Series 52, Series 62, Series 79, and Series 82. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 24, Series 26, Series 52, Series 62, Series 79, and Series 82):

When must a Suspicious Activity Report be filed under the Bank Secrecy Act?

Answers:

A. Within 15 days of the transaction

B. Within 15 days of discovery

C. Within 30 days of the transaction

D. Within 30 days of discovery

Correct Answer: D. Within 30 days of discovery

Rationale: The Bank Secrecy Act requires that money service businesses file Suspicious Activity Reports (SARs) within 30 days of becoming aware of any suspicious transaction that is required to be reported. In the securities business, suspicious transactions are required to be reported if they involve $5,000 or more. A copy of the report must be kept for five years.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Solomon Exam Prep Launches “Series 52 MSRB Municipal Securities Representative Qualification Exam” Study Program

Solomon Exam Prep is excited to announce the launch of the Solomon Exam Prep study program for the Municipal Securities Rulemaking Board’s Series 52 Municipal Securities Representative Qualification Exam. Continue reading

Individuals who pass the Series 52 exam qualify to be a Municipal Securities Representative and may work in multiple capacities relating to municipal securities, including underwriting, sales, trading, advising, and consulting with issuers, research, investment advising, and communicating with public investors about municipal securities, including US government and agency securities.

Since November 7, 2011 when FINRA revamped the Series 7 General Securities Representative Examination by de-emphasizing non-sales activities and by reducing the number of municipal securities questions, in the context of municipal securities passing the Series 7 only qualifies a registered person to be involved in the purchase and sale of municipal securities to customers, a qualification called the Municipal Securities Sales Limited Representative. However, anyone who passed the Series 7 before November 7, 2011 is grandfathered into the Municipal Securities Representative category provided the individual has kept their Series 7 license current.

For representatives whose activities are limited solely to municipal fund securities (i.e. 529 College Savings Plans and Local Government Investment Pools), the MSRB says those who pass the Series 6 exam are a “Municipal Securities Representative qualified by virtue of being a Limited Representative Investment Company and Variable Contracts Products.”

The Series 52 is a pre-requisite exam for the Series 53 Municipal Securities Principal Exam.

The Municipal Securities Representative Qualification Exam is written by the MSRB but it is administered by FINRA who charges $180 for the pleasure of taking the Series 52. The exam contains 115 questions, each worth 1 point. The individual is given 3 and one-half hours to complete the exam, and a minimum score of 70% is needed to pass.

The exam is broken down in to 4 distinct topic areas which are weighted differently:

Municipal Securities – 57%

U.S. Government, Federal Agency and Other Financial Instruments – 4%

Economic Activity, Government Policy and the Behavior of Interest Rates – 13%

Federal Legal Considerations – 26%

For more information and a complete break-down of the topics in the exam, visit http://www.msrb.org/Rules-and-Interpretations/Professional-Qualification.aspx

Study Question of the Week: January 29, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 24, Series 52, Series 62, Series 65, and Series 82. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 7, Series 24, Series 52, Series 62, Series 65, and Series 82):

How much would you pay for a $1,000 10-year Treasury bond priced at 101.08 (excluding accrued interest)?

Answers:

A. $1,010.80

B. $10,108.00

C. $1,012.50

D. $1,010.25

Correct Answer: C. $1,012.50

Rationale: Treasury bonds are typically priced in percentage points of par and in fractions of 32nds of percentage points. For example the .08 of the quote should be understood as 8/32nds of a percentage point or .25%. Thus, 101.08 is equivalent to 101.25% of par which is $1,000 x 101.25 which is $1,012.50.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Exam Alert: SEC Delays Compliance Date of Municipal Adviser Registration Rules, Responds to FAQs

The SEC has announced that compliance with the final municipal adviser registration rules will not be required until July 1, 2014. The SEC has also released interpretive guidance for the municipal adviser registration rules, in the form of responses to frequently asked questions. Continue reading

The SEC has announced that compliance with the final municipal adviser registration rules will not be required until July 1, 2014. This date is when the first set of advisers will be required to register under the rule.

The SEC has also released interpretive guidance for the municipal adviser registration rules, in the form of responses to frequently asked questions. The FAQs cover a wide range of topics, including the advice standard, various exemptions and exclusions, issuance of municipal securities, remarketing agent services, and more. The FAQs can be found here.

For more information on the municipal adviser registration rules, see our two prior exam alerts on the topic, here and here.

Sources:

SEC Release 2014-8: SEC Announces New Date for Compliance with Final Municipal Advisor Registration Rules

SEC Release 2014-7: Interpretive Guidance on Municipal Advisor Registration Rules

This alert applies to the Series 7, Series 52, and Series 53.

Study Question of the Week: January 22, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 52, and Series 65. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 52, and Series 65):

The Fed (Federal) Funds rate refers to:

Answers:

A. The rate banks have to pay when borrowing from the Federal Reserve

B. The rate broker-dealers pay when borrowing on behalf of customers

C. The rate that the most credit worthy customers pay when borrowing

D. The rate banks charge each other for overnight loans over $1,000,000

Correct Answer: D. The rate banks charge each other for overnight loans over $1,000,000

Rationale: The Federal Funds Rate refers to the rate that banks charge each other for short-term loans.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Exam Alert: Municipal Advisor Registration Rules Take Effect

On January 13, 2014, the SEC will put into effect new rules to require the ongoing registration of municipal advisers. A municipal adviser is defined as a person that either:

– gives advice to a municipal entity or obligated person regarding municipal securities, or

– solicits a municipal entity or obligated person.

The SEC has released a guide (http://www.sec.gov/info/smallbus/secg/muni-advisor-reg-secg.htm) on who is and is not required to register… Continue reading

On January 13, 2014, the SEC will put into effect new rules to require the ongoing registration of municipal advisers. A municipal adviser is defined as a person that either:

gives advice to a municipal entity or obligated person regarding municipal securities, or
solicits a municipal entity or obligated person.

The SEC has released a guide on who is and is not required to register – certain firms and professionals are exempt while acting in their regular capacity. The guide also specifies the filing requirements for municipal adviser registration.

See also our prior alert on this topic for additional information.

This alert applies to the Series 7, Series 52, and Series 53.