Study Question of the Week: July 2, 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 62. –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 7Series 51Series 52Series 53, and Series 62): 

A flat bond is a bond that:

Answers:

A. Has a fixed interest rate

B. Is quoted in terms of its yield-to-maturity

C. Has no call provision

D. Does not trade with accrued interest

Correct Answer: D. Does not trade with accrued interest

Rationale: Bonds are quoted at a flat price, also called a clean price, meaning that accrued interest is not factored into the quotation. Bonds generally trade at a “dirty” price, with accrued interest factored in. Sometimes bonds trade flat, however, meaning that the bond carries no accrued interest. Bonds in default and zero coupon bonds are two examples of bonds that trade flat.

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

Study Question of the Week: June 25, 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 51Series 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: June 18, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the 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 7Series 52, and Series 65): 

Jenny lives in Minnesota. She is comparing a Washington state municipal bond that pays 5% to similar corporate bonds. She has a federal tax rate of 20% and a State rate of 4%. What yield will the corporate bond have to pay to be equivalent to the municipal bond?

Answers:

A. 4%

B. 5%

C. 6.25%

D. 6.58%

Correct Answer: C. 6.25%

Rationale: Because Jenny lives in Minnesota, the interest on her municipal bond will be tax-exempt at the federal level, but not at the state level. To calculate the tax-equivalent yield of a municipal bond, simply take the rate of the municipal bond and divide it by 1 minus the tax rate. So the tax equivalent yield = .05/(1-.20) = .0625 or 6.25%.

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

Study Question of the Week: June 12, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 52, Series 62, Series 65, 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 7, Series 52Series 62, Series 65Series 79, and Series 82): 

All of the following is true of the Securities Act of 1933 except?

Answers: 

A. One of its purpose 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

Correct Answer: B. It requires that all securities are registered with the federal government prior to offering them for sale

Rationale: The Securities Exchange Act of 1933 has two main purposes: (1) to require that companies publicly disclose all relevant financial information about their securities prior to offering them for sale, and (2) to prohibit fraud and deceit in the marketing of securities. The Act requires that most securities be registered with the
federal government prior to their sale, but there are securities that are exempt from registration. The Act regulates how securities are issued and first sold to the public.

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

Study Question of the Week: May 21, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 52, and Series 53. –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 7Series 52, and Series 53): 

The spread in a municipal underwriting is equal to:

Answers:

A. the manager’s fee plus the total takedown

B. the manager’s fee plus the additional takedown

C. the additional takedown plus the concession fee

D. the total takedown plus the additional takedown

Correct Answer: A. the manager’s fee plus the total takedown

Rationale: The spread consists of the manager’s fee plus the total takedown. The total takedown may be further broken down into the additional takedown and the concession fee.

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

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 51Series 52, Series 53Series 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 6Series 7, Series 52Series 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.

Amazing Pass Rates!

For over 10 years Solomon Exam Prep has been devoted to helping students to prepare effectively for various securities and insurance licensing exams. We pride ourselves on our customer service and easy-to-use products that make the studying process as painless as possible. Continue reading

For over 10 years, Solomon Exam Prep has been devoted to helping students effectively prepare for various securities and insurance licensing exams. We pride ourselves on our customer service and easy-to-use products that make the studying process as painless as possible.

Solomon Exam Prep has recently published a brand-new line of materials for the MSRB Series 51, Series 52 and Series 53 exams. We are pleased to report that our early Series 52 and Series 53 students have all passed their exams!

We keep track of our students through BrokerCheck and keep in contact with them via e-mail. “We are excited to announce a 93% pass rate across all of our exams,” said president Jeremy Solomon. We are constantly publishing more materials and updating our current materials, which is how we can maintain such a high pass rate. Our Series 7 boasts a 95.0% first time pass rate, Series 82— 97.4%, Series 55— 96.9%, and Series 63— 93.6% just to name a few.

Are you studying for your FINRA, NASAA, or MSRB exams? Order now and be a part of our amazing pass rate!

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 6Series 7, Series 24, Series 26, Series 52, Series 53, Series 66Series 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.