Question 1

If the Federal Reserve wished to ease credit, which of the following steps would it take?

Options :

A : raise the discount rate

B : purchase securities in the open market

C : lower reserve requirements

D : both B and C

Answer: D

Question 2

Bubba owns stock with cumulative voting rights. There are five vacancies on a board and he owns 100 shares of stock. Bubba is entitled to cast the following votes:

Options :

A : a total of 100 votes

B : a total of 100 votes per

C : a total of 500 votes

D : you are not allowed to vote

Answer: C

Question 3

Securities may be sold under SEC rule 144 provided that the following conditions are met:

Options :

A : the company files regular financial data with the SEC

B : they are sold in agency transactions only

C : they are sold in principal transactions only

D : both A and B

Answer: A

Question 4

The most common type of bond issued by a well-established company is:

Options :

A : a debenture

B : a senior secured note

C : a convertible

D : an open-end mortgage

Answer: A

Question 5

Hypothecation usually refers to which of the following?

Options :

A : forecasting the market based upon past performance

B : pledging securities as collateral

C : determining a reasonable offering price for a new issue

D : none of the above

Answer: B

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