Question 1

An investor wants to purchase mutual fund shares, but she is concerned about the tax efficiency of the fund. Which of the following disclosures required under industry regulations will help the investor make an informed decision?

Options :

A : The fund-s turnover ratio

B : Sales charges and breakpoint discount opportunities

C : The commissions that the fund pays on each transaction

D : Projections of future dividend and capital gains distributions

Answer: A

Question 2

The civil penalty for an individual who is convicted of an insider trading violation is permitted to be an amount up to how many times the profit gained or loss avoided?

Options :

A : 1 time

B : 3 times

C : 6 times

D : 10 times

Answer: B

Question 3

Company ABC stock currently trades on an exchange. An ABC insider wants to sell a large number of shares of her privately held ABC stock. ABC files the necessary paperwork to register the shares, but the insider decides to wait and sell the stock at a later date. Which of the following terms best describes the type of offering that is occurring in this situation?

Options :

A : A rights offering

B : A private offering

C : An exempt offering

D : A secondary offering

Answer: D

Question 4

The formation of an asset-backed security or debt obligation that represents a claim on the cash flows from mortgage loans is known as:

Options :

A : Securitization

B : Hypothecation

C : Loan processing

D : Claim processing

Answer: A

Question 5

Which of the following statements is true regarding 529 savings plans?

Options :

A : 529 contributions are tax deductible in all states

B : There are income limitations for contributing to a 529 savings plan.

C : The account beneficiary has control over the assets in a 529 savings plan.

D : Assets are transferable to another 529 savings plan tax-free if the new beneficiary is a family member of the current beneficiary.

Answer: D

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