September Study Question of the Month

Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card. Continue reading

Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.

Question

Relevant to the Series 62, Series 79, and Series 82.

 

 

 

 

 

Which of the following is an advantage of a 506(b) offering?
 
A. Sold shares are not restricted
B. It may be advertised to the public because it is considered a public offering
C. Instead of a prospectus, it may use a briefer document called an offering circular

D. It has no dollar limit

August Study Question of the Month

Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card. Continue reading

Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.

Question

Relevant to the Series 6Series 7, Series 24, Series 26Series 62, Series 79Series 82, and Series 99.

 

 

 

 

 

Which of these records about your customer Doug is your firm required to retain for five years?
 
A. Doug’s customer ledger
B. A SAR you filed on Doug
C. A complaint Doug filed about you

D. A confirmation of one of Doug’s trades

Answer: B. The general tier of recordkeeping is three years, six years, and lifetime, although there are some records with retention periods of four or five years. Additionally, the firm must keep most records easily accessible for the first two years.

Customer ledgers fall in the six-year tier, Suspicious Activity Reports (SARs) fall in the five-year tier, customer complaints fall in the four-year tier, and trade confirmations fall in the three-year tier.

July Study Question of the Month

Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card. Continue reading

Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.

Question

Relevant to the Series 6Series 7Series 62Series 65,  Series 66,  Series 82, and Series 99.

 

 

 

 

 

Bob owns convertible preferred stock in BigCo. Which of the following is a taxable event for Bob?
 
A. He converts it into common stock
B. Due to a corporate restructuring, he receives additional shares
C. He receives a cash dividend that is less than the amount that the share price declined last quarter

D. Due to a corporate merger, his shares are exchanged for shares in LargerCo

Answer: C. Receiving a dividend (even a qualified dividend) is a taxable event. When a company merges with another company, it may give its shareholders stock in a new company in exchange for the stock they currently hold. This is usually not a taxable event, meaning the shareholder does not have to pay taxes on the new shares at the time of the exchange. Moreover, if the company gives shares of common or preferred stock to shareholders because of a corporate restructuring or bankruptcy, this is also not a taxable event. Additionally, the conversion of convertible preferred stock (or bonds) to common stock is not a taxable event.

April Study Question of the Month

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.*** Continue reading

Congratulations to Margaret C., this month’s Study Question of the Month winner! 

See the answer below!

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, Series 82)

To qualify as a long-term capital gain or loss, stock must be held for more than one year. At purchase, the holding period clock begins:

A. On the trade date
B. One day after the trade date
C. On the settlement date
D. One day after the settlement date

Answer: B. According to the IRS, the holding period clock begins the day after the shares were purchased.

It’s Settled: SEC Shortens Regular-Way to T+2

If you’ve ever traded securities or studied for a securities licensing exam, then you’ve probably come across T+3. No, it’s not an herbal supplement or an embarrassing medical procedure. Continue reading

If you’ve ever traded securities or studied for a securities licensing exam, then you’ve probably come across T+3. No, it’s not an herbal supplement or an embarrassing medical procedure. T+3 refers to the regular-way settlement period for most securities transactions. This means that securities must be paid for and delivered by three business days from the trade date. T+3 also means you don’t become the owner of record of a security until three business days after you purchase it.

Well, add T+3 to the list of things that have gone out of style. Effective May 30, 2017, the SEC will shorten the regular-way settlement period to two business days. And so will begin the age of T+2, which is intended to “increase efficiency and reduce risk for market participants,” according to SEC Acting Chairman Michael Pinowar.

This shorter settlement period for the trading of secondary market securities has been discussed by the SEC for years. The change is expected to lower margin requirements for clearing agency members, reduce liquidity stress when markets are volatile, and harmonize settlement with European markets, which moved to T+2 in 2014.

This settlement period will not apply to every securities transaction, though. T+2, like T+3 before it, will apply to:

  • Stocks
  • Bonds
  • Municipal securities
  • Exchange-traded funds
  • Mutual funds traded through a brokerage firm
  • Unit investment trusts
  • Limited partnerships that trade on an exchange

The securities industry moves fast. Don’t get left behind! Visit www.solomonexamprep.com or call us at 503-601-0212 for more information about the latest securities exam preparation and education.

Solomon has helped thousands pass their Series 6, Series 7, Series 24, Series 26, Series 27, Series 28, Series 50, Series 51, Series 52, Series 53, Series 62, Series 63, Series 65, Series 66, Series 79, Series 82, and Series 99.

Announcing the Release of the Solomon Exam Prep Android Mobile App!

With the release of the Solomon Exam Prep app, you have full mobile access to your Solomon study materials with the click of a button. Continue reading

Do you need to take a securities licensing exam?

Do you wish you had more time to study?

With the release of the Solomon Exam Prep Android app, you have full mobile access to your Solomon study materials at the click of a button.

  • Easier and quicker—Just click the Solomon Exam Prep icon on your phone to be taken directly to your account.
  • Access all your materials—The app provides full site functionality and access to your study guide, exam simulator, audiobook, and video lecture.
  • No typing on tiny keyboards—Don’t worry about typing in a web address! Our app will take you right where you need to be.

Move into the future of mobile securities exam prep with the Solomon Exam Prep app!

To download the app, please visit: goo.gl/IkNceh

Solomon Exam Prep has helped thousands of financial professionals pass their FINRA, NASAA, and MSRB licensing exams, including the Series 6, Series 7, Series 24, Series 26, Series 27, Series 28, Series 50, Series 51, Series 52, Series 53, Series 62, Series 63, Series 65, Series 66, Series 79, Series 82, and the Series 99.

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Study Question of the Month – September 2016

This month’s study question from the Solomon Online Exam Simulator question database is now available! Continue reading

Congratulations to Nick M., this month’s Study Question of the Month winner! (Nick M. is no relation to last month’s winner.)

See the answer below!

This month’s study question from the Solomon Online Exam Simulator question database is now available!

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

studyQuestion

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, and Series 99):

A single 41-year old who earns $200,000 per year wants to convert his traditional IRA to a Roth IRA. Which of the following is the best answer?

A. He may not convert because his income exceeds the limit permitted for such conversions.

B. He may convert up to $5,500 per year.

C. He may not convert because he younger than 50.

D. He may convert without restrictions.

Answer: D. If your modified adjusted gross income is greater than $133,000 (single filer) or $194,000 (married filing jointly), then you may not contribute to a Roth IRA. However, there are no income or age restrictions on converting funds from a traditional IRA to a Roth IRA. A conversion from a traditional IRA to a Roth IRA is not counted as a “rollover” under the one per year rollover rule.

Study Question of the Month – August 2016

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

Which of the following would most likely be classified as a branch office? Continue reading

Congratulations to Nick M., this month’s Study Question of the Month winner!

See the answer below!

This month’s study question from the Solomon Online Exam Simulator question database is now available!

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

studyQuestion

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

Which of the following would most likely be classified as a branch office?

A. The floor of a registered exchange

B. A vacation home where the registered representative works for 45 business days a year

C. A customer service office where no sales activities are conducted

D. A location used primarily for non-securities activities and from which 25 securities transactions are effected a year

Answer: B.     

A branch office is any location where one or more associated employees is in the business of soliciting or effecting (but not executing) the purchase or sale of any security.

A location outside of a primary residence, for example, a vacation home, is considered a non-branch location as long as it is used for securities business fewer than 30 business days per year. 

The floor of a registered exchange is also considered a non-branch office if it is where a member firm conducts business with public customers.

Other examples of non-branch offices include:

  • Any location that is used primarily to engage in non-securities activities and from which the associated persons effect no more than 25 securities transactions in any one calendar year (provided that any retail communication identifying such location also sets forth the address and telephone number of the location from which the associated persons conducting business at the non-branch locations are directly supervised)
  • Any office location established solely for customer service and/or back office type functions where no sales activities are conducted

 

 

 

 

Treasury Reports Record-Low Yield on 10-Year Note

On Friday, July 8, the Treasury Department reported that the yield on the 10-year Treasury note was its lowest ever: 1.36%. This is astonishing given that this popular US government debt investment has been traded for 226 years (since 1790). Continue reading

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On Friday, July 8, the Treasury Department reported that the yield on the 10-year Treasury note was its lowest ever: 1.36%.  This is astonishing given that this popular US government debt investment has been traded for 226 years (since 1790).

Treasury notes and other government debt instruments are affected by supply and demand, inflation expectations, monetary policy, and the general state of the economy, among other factors.  This historic drop in Treasury yields has been driven by increased demand due to the global “flight to quality” after the Brexit vote, negative yields in Europe and Japan, a cautious Federal Reserve, and slow economic growth around the world.

For anyone studying for the Series 6, Series 7, Series 65, Series 66, Series 79, Series 62, or Series 82, it’s important to remember that bond prices and yields move in opposite directions. That’s why the relationship is often compared to a seesaw.  When the demand for bonds increases, bond prices go up, and yields go down. Conversely, when demand decreases, bond prices go down and yields go up. As demand has surged for Treasury notes and other US government debt, the yield on these notes has declined to record low levels.