Tag: Series 24

Study Question of the Week: January 16, 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 62, and Series 79. –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 62, and Series 79): 

What IPO method will offer the underwriter a green shoe option?

Answers:

A. Best efforts

B. Mini-max

C. Firm commitment

D. Bought deal

Correct Answer: C. Firm commitment

Rationale: A firm commitment underwriting is an agreement that the underwriter will purchase all the securities at a discount and then sell the securities to the public at a fixed public offering price. In this type of agreement, the underwriter is responsible for the marketing and sale of the securities and assumes all the risk of the offering, including the liability of any unsold shares. An over-allotment option, also called a green shoe option, gives the syndicate the right to require the issuing company to issue up to 15% more shares in the offering at the syndicate’s discretion. Green shoe options are offered on firm commitment underwritings only.

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

Study Question of the Week: December 26, 2013 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, 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 24, Series 26, and Series 65): 

According to the Investment Company Act of 1940, for 75% of its assets, a diversified mutual fund will have:

Answers:

A. No more than 5% of its assets in any one company, and will own no more than 5% of any company’s outstanding shares

B. No more than 5% of its assets in any one company, and will own no more than 10% of any company’s outstanding shares

C. No more than 10% of its assets in any one company, and will own no more than 5% of any company’s outstanding shares

D. No more than 10% of its assets in any one company, and will own no more than 10% of any company’s outstanding shares

Correct Answer: B. No more than 5% of its assets in any one company, and will own no more than 10% of any company’s outstanding shares

Rationale: According to the Investment Company Act of 1940, for 75% of its assets, a diversified mutual fund will have no more than 5% of its assets in any one company, and will own no more than 10% of any company’s outstanding shares.

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

Testimonial Tuesday: December 17, 2013 Edition

“I passed my Series 24 with two weeks of nearly full-time study, using the textbook, the online class, and the exam simulator.” Continue reading

 

“I passed my Series 24 with two weeks of nearly full-time study, using the textbook, the online class, and the exam simulator.  The textbook was very readable and helpful in providing complete explanations, as well as helpful memorization tips.  The online class and pre-recorded sessions were crucial to get through all of the material and put it in relative context.  It was helpful to be able to have questions answered instantly and via email afterward.  The online simulator questions were just like the exam questions, and the immediate feedback function was essential for learning from the practice quizzes and exam.  I needed every minute of my study and practice time to count, and Solomon Exam Prep made it possible.  Thank you!” -T. Richmond, Bethesda, MD

 

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Study Question of the Week: December 11, 2013 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 26, Series 62, 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 24, Series 26, Series 62, Series 82, and Series 99): 

Jenny and Sam each have an individual account, and they have a joint account, and an UGMA account for their daughter Sarah. What is the combined maximum amount that is covered by the SIPC for the four accounts?

Answers:

A. $500,000

B. $1,000,000

C. $1,500,000

D. $2,000,000

Correct Answer: D. $2,000,000

Rationale: SIPC covers a maximum of $500,000 per “separate customer” at a broker-dealer or clearing firm including up to $250,000 in cash.  Total coverage can be higher for multiple accounts if the accounts are considered to be held by separate customers. There are five categories of separate customers defined by the SIPC. These categories include 1) individual accounts, 2) joint accounts, 3) accounts held by executors, administrators, and guardians/custodians/conservators (such as UGMA accounts), 4) accounts held by corporations, partnerships, or unincorporated associations, and 5) trust accounts. Thus, two individual accounts held by two different people, one joint account, and one UGMA account would be considered four separate customers by the SIPC, and therefore subject to a maximum of $2,000,000 of coverage.

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

Study Question of the Week: November 20, 2013 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 62, 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 7, Series 24, Series 26, Series 62, and Series 82): 

Which regulation empowers the Federal Reserve to regulate credit associated with the purchase of securities?

Answers:

A. The Exchange Act of 1934

B. The Securities Act of 1933

C. Regulation T

D. Regulation U

Correct Answer: A. The Exchange Act of 1934

Rationale: Section 7 of the Exchange Act of 1934 empowers the Federal Reserve to regulate credit associated with respect to the purchase of securities, also known as margin. Its intent is to manage the amount of speculative activity that can be applied to securities transactions and to manage the supply of money in the credit markets.The Federal Reserve responded to its new powers by enacting Regulation T, which places credit restrictions on broker-dealers by establishing initial margin requirements and prescribing how a margin transaction must be maintained. Initial margin requirements are currently set at 50%. Regulation T was soon followed in 1936 by Regulation U, which imposes credit restrictions on other lenders that would finance margin transactions, such as banks. Regulation U forbids banks from extending more credit than the “maximum loan value” for margin securities, which it identifies as 50% of the stock’s current market value.

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

Testimonial Tuesday: November 5, 2013 Edition

“…Solomon’s angle on this material was closest to the actual test and was the reason I got there.” Continue reading

“3rd time is a charm and it took Solomon to do it. None of the other materials in my first two attempts were strong enough to enable me to reason my way to the correct answers. Solomon’s angle on this material was closest to the actual test and was the reason I got there.

As an aside, the ongoing personal help was very surprising and commendable. Thank you, Solomon!” -Jason Bowen, Southington, CT

 

 

Study Question of the Week: October 9, 2013 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 62, 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 24, Series 62, and Series 99): 

Which of the following agreements allows the broker-dealer to use the customer’s securities as collateral on a loan?

Answers: 

A. loan consent agreement

B. hypothecation agreement

C. credit agreement

D. prime broker agreement

Correct Answer: B. hypothecation agreement

Rationale: The hypothecation agreement allows the broker-dealer to use the customer’s securities as collateral on a loan. The credit agreement details the terms and conditions for the credit that the broker-dealer is extending to the customer. This agreement will include how the firm will calculate the interest charged on the credit and what interest rate the loan rate it will be tied to (e.g., broker call rate). The loan consent agreement permits the broker-dealer to lend the customer’s securities to other customers wishing to execute short sales. This agreement is not required of customers opening a margin account, but strongly encouraged by the broker-dealer.

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

 

Study Question of the Week: October 2, 2013 Edition

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

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

Question (Relevant to the Series 24 and Series 79): 

An issuer of publicly offered securities must file:

Answers:

A. Five copies of the preliminary prospectus with the SEC no later than the date that it is first sent to investors

B. Ten copies of the preliminary prospectus with the SEC no later than the date that it is first sent to investors

C. Five copies of the preliminary prospectus with the SEC at least 10 days prior to the date that it is first sent to investors

D. Ten copies of the preliminary prospectus with the SEC at least 10 days prior to the date that it is first sent to investors

Correct Answer: A

Rationale: An issuer of publicly offered securities must file five copies of the preliminary prospectus with the SEC no later than the date that it is first sent to investors.

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

Study Question of the Week: September 16, 2013 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 55, and Series 62. –ANSWER POSTED– Continue reading

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

Question (Relevant to the Series 7, Series 24, Series 55, and Series 62): 

According to the Alternative Uptick Rule, if a stock declines by 10% or more from the previous day’s close, a short sale can only be made at a price:

Answers:

A. Above the best bid for the remainder of the trading day and the next trading day

B. At or below the best bid for the remainder of the trading day and the next trading day

C. Above the best ask for the remainder of the trading day and the next trading day

D. At or below the best ask for the remainder of the trading day and the next trading day

Correct Answer: A. Above the best bid for the remainder of the trading day and the next trading day

Rationale: According to the Alternative Uptick Rule, if a stock declines by 10% or more from the previous day’s close, a short sale can only be made at a price above the best bid for the remainder of the trading day and the next trading day. The alternative uptick rule can only be triggered during regular market hours, but the pricing restriction holds during regular and extended trading hours. The rule only applies to NMS securities traded on or off an exchange. The Alternative Uptick Rule is also referred to as the Rule 201 Circuit Breaker. Orders marked short exempt are exempt from this rule.

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