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1. Which of the following is not a characteristic of treasury bills?
A) they are quoted on yield-to-maturity percentages
B) the bid price is higher than the offer price
C) they mature one to three years from the date of issuance
D) their payments are exempt from state income tax
2. To accommodate a customer's order to buy an over-the-counter stock, a broker/dealer is permitted to:
A) act as agent on this transaction
B) sell these shares short to the customer
C) sell him shares from the firm's inventory
D) all of the above
3. Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the
prices listed
1 00 ABC $30
2 00 XYZ $70
2 00 QBB $40
2 00 KKK $25
Total market value = $30,000
Debit balance in the account = $12,000
Net equity balance of the account = $18,000
What is Bubba's excess equity in the account?
A) $3,000
B) $0
C) $12,000
D) $18,000
4. Bubba Brokerage Corporation announces through its wire system that it has a large block of stock for sale.
Customers purchasing the stock will not pay a commission. The block is crossed on the NYSE floor and is
printed on the NYSE tape. This is called a:
A) exchange distribution
B) specialist block purchase
C) special order
D) secondary distribution
5. Under an initial federal requirement of 70% equity, Bubba purchases 100 shares of XYZ at $40 per share
and wishes to satisfy the margin call by delivering another listed security into his account. He may do so
by depositing stocks with a market value of:
A) $9,333
B) $4,000
C) $2,800
D) $5,714
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: A | Question # 4 Answer: A | Question # 5 Answer: A |
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