9Jul/140
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.

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

Check back later this week for the correct answer & full rationale!

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

25Jun/140
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.

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.

13Jun/140
Qualified Dividends Video Overview

This is a short video overview of what you need to know about qualified dividends for securities licensing exams.

To order exam prep materials please head to our main website http://solomonexamprep.com or give us a call at 503.601.0212.

12Jun/140
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.

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.

4Jun/140
Study Question of the Week: June 4, 2014 Edition

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 24Series 62Series 79, and Series 82): 

Under Rule 144, which of the following persons would be subject to holding period limits on a re-sale?

Answers: 

A. A C.E.O who holds 10,000 shares of the publicly traded company he runs

B. A C.E.O who purchased 10,000 shares of restricted securities two years ago of the company that he runs

C. A person who is not an affiliate purchased 10,000 shares in a private placement 1 year ago

D. A person who is not an affiliate purchased 10,000 shares of a company’s stock 2 months ago from an affiliate of the company

Correct Answer: D. A person who is not an affiliate purchased 10,000 shares of a company’s stock 2 months ago from an affiliate of the company

Rationale: If a person purchases shares from an affiliate, the shares are considered restricted, even if they were not restricted in the affiliates’ hands and therefore subject to holding period limits. Holding period limits are 6 months for reporting companies and 1 year for non-reportng companies.

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

28May/140
Study Question of the Week: May 28, 2014 Edition

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 24, Series 62, Series 79, and Series 82): 

Which of the following is not exempt from the registration requirements of the Securities Act of 1933?

Answers:

A. State bonds

B. Insurance company variable annuities

C. Municipal bonds

D. Common carrier (e.g., railroad) securities

Correct Answer: B. Insurance company variable annuities

Rationale: State and municipal bonds are backed by the full faith of the respective governments. Common carrier securities are reviewed by the ICC. If variable annuities were not registered, no authority would have jurisdiction over them.

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

20May/140
Testimonial Tuesday: May 20, 2014 Edition


"I am yet another very satisfied customer who could not have passed the Series 82 exam without the assistance of the Solomon Exam Prep materials. I had used another set of study materials without success. The Solomon Exam Prep materials increased my score substantially. I passed with flying colors. I am a true believer and will use their materials for my Series 63 exam."
-Rachel Kemp

Read more reviews here: Solomon Exam Prep Reviews

14May/140
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.

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.

30Apr/140
Study Question of the Week: April 30, 2014 Edition

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 26Series 62, Series 79, Series 82, and Series 99): 

XYZ stock is trading at $10/share. ABC Co. makes a partial tender offer for XYZ stock at $11/share. John Johnson holds 1000 shares of XYZ stock. After ABC Co. announces the tender offer, John writes 10 calls of XYZ stock at $10.50/share. John then tenders as many shares of XYZ stock as he is legally permitted to. How many shares of XYZ does John tender?

Answers:

A. 0

B. 500

C. 1000

D. 2000

Correct Answer: A. 0

Rationale: John sold 10 calls after the tender offer was announced at a strike price lower than the tender offer price. As a result, the call is considered a short position for the purposes of calculating how many shares he can tender. John can tender up to his net long position in the stock, which is his long position (1000 shares) minus his short position (10 calls * 100 shares each = 1000 shares). 1000 - 1000 = 0, so John can tender 0 shares.

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

16Apr/140
Study Question of the Week: April 16, 2014 Edition

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 7Series 24Series 26, Series 62Series 79, Series 82, and Series 99): 

For the question below, assume that each of the answers is solely for the benefit of the recipient and are classified as gifts, not business entertainment.

Which of the following gifts would be a violation under Rule 3220:

Answers:

A. A $20 giftcard given to a salaried employee

B. A holiday fruit basket valued at $80 paid for, or provided by, a third party vendor

C. A vase valued at $120, given as a wedding present and paid for by the employee

D. A dinner cruise valued at $120, if written consent was provided by the recipient's employer

Correct Answer: D. A dinner cruise valued at $120, if written consent was provided by the recipient's employer

Rationale: FINRA Rule 3220 is a broad rule with few exceptions. In the above examples, a $20 gift card given to a salaried employee would not violate the rule because it is not over the $100 limit. Regardless of the entity that pays for it, an $80 fruit basket would not violate the rule because it is not over $100. A dinner cruise valued at $120, even if written consent was provided by the recipient's employer, is a violation because a flat $100 standard is applied, whether or not the recipient's firm deems it appropriate. Note that in prior years, employees of NYSE firms were able to make such gifts under this scenario.

Even though it exceeds the $100 standard, a vase valued at $120, given as wedding present and paid for the by the employee is not a violation because it falls outside of the Rule 3220 restrictions. If a gift is given in commemoration of a life event (wedding, birth, etc.) and it is paid for by the individual employee, it is classified as a personal gift that is not “related to the business“ of the recipient's employer. It is important to recognize that if the giver is ultimately reimbursed by their firm for the price of the present, the gift would be reclassified as a business-related gratuity and would then be in violation of the Rule's $100 limitation.

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

Ask the Professor

This is a customer service or tech support question

Send Cancel

×