Study Question of the Week: July 9, 2014 Edition

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

When new bonds are issued with the purpose of using the proceeds to pay off older bonds, it is called?

Answers:

A. Refunding

B. Defeasement

C. A sinking fund redemption

D. A bond SWAP

Correct Answer: A. Refunding

Rationale: A bond refunding is the replacement of existing bonds with new “refunding“ bonds. The issuer of refunding bonds often seeks to lower its interest payments by paying off its previously issued (refunded) bonds with newly issued bonds that pay interest at a lower rate. Another reason to refund existing bonds may be to release the issuer from legal covenants or restrictions in the original indenture.

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

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: 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.

Solomon’s Industry News: May 5, 2014 Edition

Solomon Exam Prep is happy to release this month’s edition of “Solomon’s Industry News.” Continue reading

Solomon's Industry News Header

Solomon Exam Prep is happy to release this month’s edition of “Solomon’s Industry News.” Every month we will send out industry updates from the past month, so you can stay current and up-to-date on everything that is happening here at Solomon and in the industry.

Check out this month’s edition here: Solomon’s Industry News 05/05/2014

To be added to our monthly mailing list, please click here.

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.

Exam Alert: MSRB Prohibits Municipal Dealers from Consenting to Changes to Authorizing Documents

Effective February 3, 2014, the Municipal Securities Rulemaking Board (MSRB) will amend one of its rules to help protect municipal bond investors from unexpected changes in bond authorizing documents. The amendments prohibit broker-dealers from agreeing to changes to authorizing documents when acting as an underwriter or remarketing agent, or acting as an agent for bondholders. Continue reading

Effective February 3, 2014, the Municipal Securities Rulemaking Board (MSRB) will amend one of its rules to help protect municipal bond investors from unexpected changes in bond authorizing documents. The amendments prohibit broker-dealers from agreeing to changes to authorizing documents when acting as an underwriter or remarketing agent, or acting as an agent for bondholders.

The rule allows for exceptions in certain situations. These situations include:

    • the authorizing document explicitly permits an underwriter to provide bond owner consent, and this was disclosed in the offering documents;
    • the broker-dealer owns the securities outside of its capacity as an underwriter or remarketing agent;
    • the securities are held by the remarketing agent due to a mandatory tender of the securities;
    • the bond owners have provided written consent; or
    • the underwriter provides consent on behalf of prospective purchasers, if the changes will not become effective until all current bondholders have provided consent.

The “authorizing document” refers to the trust indenture, resolution, ordinance, or other document under which the securities are issued.

Source: MSRB Enhances Protections for Investors Against Unexpected Changes to Bond Authorizing Documents

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