SERIES_6 questions • Exam prepare

Exam contains 316 questions

Page 9 of 53

Question 49 🔥

Which of the following statements regarding zero-coupon bonds is true?

Which database solution meets these requirements?

A. An advantage of investing in zero -coupon bonds is that the bondholder does not receive interest income that he must pay taxes on each year and instead receives profits from the bond investment in the form of tax-preferred capital gain income when the bond matures.

B. Only governments at the federal, state, or local levels, or government agencies are permitted to issue zero-coupon bonds.

C. All else equal, zero-coupon bonds will have less price fluctuation when interest rates change.

D. Although the bondholder receives no interim interest payments from his investment in zero -coupon bonds, the difference between the purchase price and the

Discussion of the question

Question 50 🔥

Which of the following statements regarding CMOs is false?

Which database solution meets these requirements?

A. CMOs are zero-coupon bonds that are backed by real estate.

B. Relative to other bonds, CMOs are illiquid.

C. CMO investors are divided into classes, and the class determines when the investor will receive payments of principal.

D. CMOs are considered to have lower risk and, therefore, offer lower returns.

Discussion of the question

Question 51 🔥

You have a client, Richie Rich, who is in the 39.6% marginal tax bracket, and one of his investment goals is to minimize his payments to the IRS.Which of the following instruments would serve this purpose?

Which database solution meets these requirements?

A. U.S. Treasury bills

B. general obligation bonds

C. an investment-grade corporate bond

D. Both Selections A and B would serve to minimize his payments to the IRS.

Discussion of the question

Question 52 🔥

Which of the following statements regarding callable bonds is false?

Which database solution meets these requirements?

A. Callable bonds offer a higher yield than non-callable bonds, all else equal.

B. Investors in callable bonds are subject to prepayment risk.

C. The issuer of a callable bond is most likely to redeem the bond early when interest rates fall.

D. A callable bond protects the investor by allowing him to sell his bond back to the issuer and invest in another, similar-risk bond that pays a higher rate of

Discussion of the question

Question 53 🔥

Which of the following securities always sell at a discount from their face values?I. Treasury bills -II. Treasury notes -III. industrial revenue bonds -IV. bankers acceptances -

Which database solution meets these requirements?

A. I only

B. I and II only

C. II and III only

D. I and IV only

Discussion of the question

Question 54 🔥

Which of the following statements about the over-the-counter market is true?

Which database solution meets these requirements?

A. Only penny stocks are traded in the over-the-counter market.

B. Trades in the over-the-counter market are conducted via the auction process.

C. Only bonds and other debt instruments are traded in the over-the-counter market.

D. Stocks that are listed on exchange floors are also traded in the over-the-counter market.

Discussion of the question

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Exam contains 316 questions

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