An investor purchasing a corporate bond regular way will have to pay the contracted price plus accrued interest:

• A.up to and including the trade date
• B.up to but not including the trade date
• C.up to but not including the settlement date
• D.up to but including the settlement date

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A company earns $6 per share and pays out 20% in common stock dividends.
What does the stock yield if it sells at $30 per share?

• A.10%
• B.4%
• C.2.5%
• D.6%

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Hypothecation usually refers to which of the following?

• 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

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Bubba buys a bond issued at par with a 5% coupon that is convertible into common stock at $40.
What conversion ratio does Bubba determine?

• A.40
• B.30
• C.25
• D.15

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An advertisement for a CMO security by a member of FINRA should disclose which of the following?

• A.the exact yield investor will earn
• B.the yield based upon the prevailing discount rate
• C.that the stated yield is an estimate that may vary passed upon prepayments and market factors
• D.that the yield may be greater than the stated percentage but never less

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