6Jan/152
Study Question of the Month – January

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.***

 Study Question

Question (Relevant to the Series 7Series 24, Series 26, Series 27, Series 51, Series 52, Series 53Series 62Series 79, Series 82, Series 99) 

Jon and Jenny are married. They each have an individual account and they have a joint account owned by both of them. What is the combined maximum SIPC coverage for all their accounts?

Answers:

A. $500,000

B. $1,000,000

C. $1,500,000

D. $750,000

Correct Answer: C. $1,500,000

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 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, and one joint account would be considered three separate customers by the SIPC, and therefore subject to a maximum of $1,500,000 of coverage.

Congratulations! This month's winner is Abe B.

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

3Nov/140
Study Question of the Month – November

This month's study question from the Solomon Online Exam Simulator question database is now available.

 Study Question

Question (Relevant to the Series 6Series 7Series 62, Series 79 and Series 82): 

As the price of the underlying stock of a convertible debenture goes up:

I. The parity value of the bond increases.
II. The current yield of the bond goes up.
III. The parity value of the bond decreases.
IV. The current yield of the bond goes down.

Answers:

A. I and III

B. III and IV

C. II and III

D. I and IV

Correct Answer: D. I and IV

Rationale: With a fixed conversion schedule, the parity value of the bond increases along with the price of the underlying stock. Since the nominal yield of the bond is fixed, the current yield, expressed as a percent of the bond's price, goes down.

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

21Oct/140
Testimonial Tuesday: October 21, 2014 Edition

"I've been using Solomon Exam Preparation materials for my last four Series tests: the Series 82, Series 63, Series 79 and just recently the Series 7.  My scores on these tests were 88, 90, 88 and 90.  The Solomon texts were comprehensive and easy to read; everything you need to know is in there.  But there is so much material that these exams cover that you have to read the texts several times over and take as many practice quizzes and tests as you can until you score in the mid 80's.  Then go in for the test.  That's what I did.  I went in scoring in the mid 80's on practice exams and "peaked" at higher scores while taking the actual tests.  You can't do any better than Solomon.  I highly recommend them."

-Michael McGregor, FOCUS Investment Banking, Charlotte, NC

 

Read more reviews here: Solomon Exam Prep Reviews

1Oct/142
Study Question of the Month – October

This month's study question from the Solomon Online Exam Simulator question database is now available.

 Study Question

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

The decimal equivalent of a basis point is:

Answers:

A. 0.01

B. 0.001

C. 0.0001

D. 0.00125

Correct Answer: C. 0.0001

Rationale: A basis point is one-hundredth of one percent, or .0001.

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

30Sep/140
Testimonial Tuesday: September 30, 2014 Edition

"The people at Solomon Exam Prep were great - very helpful and the product was excellent. I passed my Series 82 with a 93 ~ Couldn't have done it without Solomon Exam Prep!"  -Terry McCrary, Seattle, WA

Read more reviews here: Solomon Exam Prep Reviews

27Aug/140
Study Question of the Week: August 27, 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 24, Series 26, Series 55, Series 62Series 79, and Series 82): 

What is the maximum civil penalty that can be imposed on a firm when an employee engages in insider trading?

Answers:

A. The greater of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of the violation

B. The lesser of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of the violation

C. Three times the amount of the profit gained or loss avoided as a result of the violation

D. $0

Correct Answer: A. The greater of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of the violation

Rationale: The maximum civil penalty that can be imposed on a firm when an employee engages in insider trading is the greater of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of the violation.

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

20Aug/140
Study Question of the Week: August 20, 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 24Series 62, Series 65, Series 79Series 82, and Series 99): 

To qualify as a REIT, a company must do all of the following EXCEPT:

Answers:

A. Invest at least 75% of its assets into real estate or cash

B. Distribute at least 90% of its taxable income to shareholders annually in the form of dividends

C. Have a minimum of 100 shareholders after its first year of operation, and no more than 50% of its shares may be held by five or fewer individuals during the last half of any taxable year

D. Derive at least 90% of its gross income from its real estate sources

Correct Answer: D. Derive at least 90% of its gross income from its real estate sources

Rationale: A Real Estate Investment Trust is a company that owns and operates income-producing real estate, such as office buildings, apartments, malls, hotels and resorts. They differ from other real estate companies in that they are required to operate the properties they develop after they have built them, rather than selling them off. Most REITs specialize in a single type of real estate.

To qualify as a REIT, it must:

    1. Invest at least 75% of its assets into real estate or cash
    2. Distribute at least 90% of its taxable income to shareholders annually in the form of dividends
    3. Be a corporation, trust, or association that would be taxable as a domestic corporation except for its status as a REIT.
    4. Be managed by a board of directors and have 'unit' shares that are fully transferable
    5. Have a minimum of 100 shareholders after its first year of operation, and no more than 50% of its shares may be held by five or fewer individuals during the last half of any taxable year
    6. Derive at least 75% of its gross income from its real estate sources
    7. Derive at least 95% of its gross income from those real estate sources mentioned above and dividends and interest from other sources
    8. Have no more than 25% of its assets in securities of taxable REIT subsidiaries

By annually distributing at least 90% of taxable income to shareholders, REIT income is not taxed at the entity level. This is huge benefit to the REIT. However, because this income has never been taxed, dividend distributions to shareholders are not considered “qualified dividends,“ instead REIT dividends are generally taxed as ordinary income at the investor's top marginal rate.

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

14Aug/140
Study Question of the Week: August 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 51, Series 52, Series 53Series 62, Series 82, and Series 99): 

When money is regularly put into an escrow account in order to redeem the bonds before maturity this is called:

Answers: 

A. A sinking fund redemption

B. Advance refunding

C. Defeasement

D. A make whole provision

Correct Answer: A. A sinking fund redemption

Rationale: A sinking fund redemption requires the issuer to set money aside regularly in a reserve account for the redemption of the bonds before maturity.

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

16Jul/140
Study Question of the Week: July 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 62, Series 65, Series 66, and Series 82): 

Ross receives 50 shares of ABC Co. as a gift, then later inherits an additional 50 shares of ABC Co. The shares were all originally purchased at $10/share. When Ross receives the shares as a gift, they are worth $20/share. When Ross inherits the shares, they are worth $30/share. When Ross eventually all sells the shares, they are worth $50/share. What is Ross's total cost basis when he sells the shares?

Answers: 

A. $1,000

B. $2,000

C. $2,500

D. $5,000

Correct Answer: B. $2,000

Rationale: Inherited shares received a stepped up cost basis based on their market value at the time of the prior owner's death. Shares received as a gift maintain their original cost basis. So the cost basis of the inherited shares is $1,500 ($30/share * 50 shares) while the cost basis of the gifted shares is $500 ($10/share * 50 shares). Adding them together gives a total cost basis of $2,000.

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

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

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.

Ask the Professor

This is a customer service or tech support question

Send Cancel

×