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NEW QUESTION 37
Under which of the following conditions are homeowners most likely to refinance existing mortgages?

  • A. when interest rates fall
  • B. when interest rates are stable
  • C. when the yield curve is inverted
  • D. when interest rates rise

Answer: A

Explanation:
when interest rates fall. Homeowners are most likely to refinance when rates are lower than the past.

 

NEW QUESTION 38
When opening a brokerage account for a customer, a registered representative must determine the customer's:

  • A. all of the above
  • B. investment objectives
  • C. financial resources
  • D. financial requirements

Answer: A

Explanation:
all of the above. All of the choices are required information for the registered representative to obtain.

 

NEW QUESTION 39
Bubba purchases 100 shares of XYZ at 78 and, on the same day, writes 1 XYZ October 80 call for a premium of 4. If the option expires unexercised, what is Bubba's profit on the 100 shares of stock?

  • A. $200
  • B. $400
  • C. $600
  • D. cannot be determined

Answer: D

Explanation:
Explanation/Reference:
Explanation: cannot be determined. Since Bubba has not yet sold the stock, a profit cannot be determined on the stock. He has a $400 profit on the option.

 

NEW QUESTION 40
Which of the following securities is traded only in the over-the-counter market?

  • A. closed-end investment companies
  • B. preferred stocks
  • C. corporate bonds
  • D. open-end investment companies

Answer: D

Explanation:
Explanation/Reference:
Explanation: open-end investment companies. Open-end mutual funds are a continuous offering of new securities that are not traded on an exchange. They trade only in the over-the-counter market. The other choices may trade over-the-counter or on exchanges.

 

NEW QUESTION 41
Which of the following municipal bonds may be grouped under the classification of "revenue bonds"?

  • A. new housing authority
  • B. limited tax
  • C. general obligation
  • D. special tax

Answer: D

Explanation:
special tax. The other categories are not revenue bonds. Special tax is the only type that fits the general grouping.

 

NEW QUESTION 42
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