ARE YOU READY?
LET’S PRACTICE!
#1. Which of the following securities is least subject to interest rate risk?
#2. A client wants to reduce non-systematic risk. Which of the following strategies is most appropriate?
#3. Which of the following is not considered a derivative?
#4. An investor places a stop-loss order to sell 100 shares of XYZ at $40. If XYZ is currently trading at $43, which of the following is true?
#5. The primary purpose of dollar-cost averaging is to:
#6. Which of the following is not required to register under the Uniform Securities Act?
#7. A limited partner may:
#8. An equity-indexed annuity provides:
#9. The term ‘churning’ refers to:
#10. Which type of risk is not reduced through diversification?
#11. Which of the following is a characteristic of a zero-coupon bond?
#12. A bond is trading at 104. What is its dollar price?
#13. An investor in a high tax bracket is likely to prefer:
#14. Which of the following is an example of a leading economic indicator?
#15. A 5% coupon bond trading at 95 has a current yield of approximately:
#16. What is the main purpose of the Securities Act of 1933?
#17. Which of the following is not a fiduciary duty?
#18. A mutual fund’s NAV is calculated:
#19. Which statement is true about variable annuities?
#20. A stock with a beta of 1.2 is expected to:
#21. Which type of account would best suit a minor who receives a gift of stock?
#22. Which of the following is a characteristic of a closed-end investment company?
#23. The Sharpe ratio is used to measure:
#24. A no-load mutual fund has no:
#25. Which type of bond has the highest credit risk?
#26. A client earns $300,000 annually and has a net worth of $2 million. He is considered:
#27. A stop order to buy becomes a market order when:
#28. Which index is most widely used to track small-cap stocks?
#29. Which of the following retirement plans is funded only by employee contributions?
#30. If interest rates rise, what happens to existing bond prices?
#31. A fiduciary must always act in the:
#32. What does alpha measure?
#33. Which security is most exposed to reinvestment risk?
#34. An investor wants capital appreciation and can tolerate high risk. Which is most suitable?
#35. Which of the following is a pass-through security?
#36. Which of the following is taxed as ordinary income?
#37. An IAR must update Form U4 within how many days of a disciplinary event?
#38. Which of the following would most likely require registration under the Securities Act of 1933?
#39. An example of systemic risk is:
#40. The term ‘soft dollars’ refers to:
#41. Which of the following is NOT considered a security?
#42. Who enforces the Investment Advisers Act of 1940?
#43. A client wants income exempt from federal taxes. You recommend:
#44. Which of the following does NOT impact the NAV of a mutual fund?
#45. In technical analysis, a ‘head and shoulders’ pattern indicates:
#46. Which of the following is an example of a defined benefit plan?
#47. A person who gives investment advice for compensation must register as:
#48. Which of the following is true of ETFs?
#49. An IAR may share in profits/losses in a customer account only if:
#50. A bond’s yield to maturity is higher than its coupon rate. This bond is trading at:
#51. Which form is used to withdraw registration of an investment adviser?
#52. The death benefit of a variable annuity is:
#53. A general obligation bond is backed by:
#54. Duration is best described as a measure of:
#55. Which of the following is an example of a lagging economic indicator?
#56. A short sale is profitable when:
#57. What is the benefit of using a revocable trust?
#58. The maximum capital loss that can be deducted against ordinary income in a year is:
#59. The wash sale rule applies to a repurchase within:
#60. An agent’s registration becomes effective:
#61. Which of the following is a non-qualified retirement plan?
#62. Which of the following assets is least liquid?
#64. Under ERISA, a fiduciary must act:
#65. A wrap fee program typically includes:
#66. A hedge fund is least likely to offer:
#67. To be considered a broker-dealer, an entity must be:
#68. An investor in a variable annuity assumes:
#69. An unsolicited order for an unregistered, non-exempt security may be accepted if:
#70. Which of the following plans is designed primarily for education savings?
#71. What does the price-to-earnings (P/E) ratio measure?
#72. The most appropriate investment for an emergency fund is:
#73. What is the main risk of a mortgage-backed security?
#74. Which government agency regulates mutual fund advertisements?
#75. Which account type avoids probate at death?
#76. A firm that executes orders for others and holds customer assets is a:
#77. Which bond type is most sensitive to interest rate changes?
#78. What does a limit order guarantee?
#79. Which of the following best defines the efficient market hypothesis?
#80. A stock trading at 20 with EPS of 2 has a P/E ratio of:
#81. The CAPM formula includes:
#82. A Roth IRA allows tax-free withdrawals if held for at least:
#83. The penalty for early IRA withdrawal is typically:
#84. Which of the following is NOT a qualified dividend?
#85. A broker-dealer’s registration with the SEC expires:
#86. Under the Uniform Securities Act, which of the following is NOT a security?
#87. A yield curve that is inverted may indicate:
#88. Which of the following is subject to double taxation?
#89. The purpose of a buy-and-hold strategy is to:
#90. A registered agent cannot share commissions with:
#91. A client has high income but limited liquidity. What is least suitable?
#92. An example of a fixed-income security is:
#93. Which retirement plan has mandatory distributions?
#94. The main risk of an international bond is:
#95. A hedge fund typically uses which type of strategy?
#96. When must the Form ADV Part 2 be delivered?
#97. A client’s suitability profile includes all EXCEPT:
#98. An investor writing a covered call hopes for:
#99. Under Regulation D, how many non-accredited investors are allowed?
#100. A wrap account differs from a traditional account in that it:
#101. Which of the following is a progressive tax?
#102. Which of the following is true of callable bonds?
#103. A registered investment adviser is required to maintain records for how many years?
#104. A qualified plan must be:
#105. An example of political risk would be:
#106. An investor who buys mutual funds regularly regardless of price is using:
#107. Which is the most accurate source of information about a mutual fund?
#108. The custodian of a minor’s account in UTMA:
#109. What is the tax treatment of contributions to a 401(k)?
#110. Which of the following investments is most appropriate for an investor needing current income?
#111. The maximum contribution to a traditional IRA for those under 50 is:
#112. When comparing mutual funds, the expense ratio represents:
#113. An IAR moving to another state must register within:
#114. An estate is subject to federal tax if the value exceeds:
#116. Investment advisers must maintain books and records for:
#117. If a client contributes to both a Roth and traditional IRA, the total limit is:
#118. What does the balance sheet show?
#119. An investor purchasing a municipal bond is primarily seeking:
#120. The NAV of a mutual fund increases when:
#121. FINRA regulates all of the following EXCEPT:
#122. The recordkeeping responsibility of an RIA includes retaining advertising materials for:
#123. What type of insurance provides lifetime coverage and cash value?
#124. The primary disclosure document for a new security offering is the:
