Question 1

Which fee is paid to mutual fund sales representatives by the mutual fund manager?

Options :

A : Redemption

B : Trailer

C : Operating

D : Management

Answer: B

Question 2

Which of the following is NOT typically a responsibility of an agency trader?

Options :

A : Developing and maintaining client relationships.

B : Providing market intelligence and trading ideas to clients.

C : Managing the dealer’s trading capital to facilitate market flows.

D : Executing block trades on behalf of institutional clients.

Answer: C

Question 3

In a scenario where interest rates are expected to decline, which of the following bonds would likely experience the greatest increase in price?

Options :

A : A bond with a short term to maturity and a low coupon rate.

B : A bond with a long term to maturity and a low coupon rate.

C : A bond with a long term to maturity and a high coupon rate.

D : A bond with a short term to maturity and a high coupon rate.

Answer: B

Question 4

If a company has a profit before interest charges and taxes of $4,500,000 and annual interest charges of $500,000, what is the interest coverage ratio?

Options :

A : 8.00.

B : 7.00.

C : 10.00.

D : 9.00.

Answer: D

Question 5

What is the primary role of sell-side dealers in the capital markets?

Options :

A : To buy securities from investors and hold them in their own portfolios.

B : To manage large institutional portfolios and execute trades on behalf of pension funds.

C : To act as intermediaries between mutual fund companies and retail clients.

D : To provide services like trading ideas, corporate finance, and research to investors.

Answer: D

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