Quiz 3

Managing underwriter

Syndicate member

Selling group

When an official statement is prepared by an issuer, it must be provided to any purchaser of the new issue

A legal opinion guarantees the payment of principal and interest on a bond

The bond counsel for the issuer prepares the legal opinion

The MSRB requires the preparation of an official statement

Order ticket must indicate if discretion was not exercised for orders executed in a discretionary account

A trade recommended by an RR and accepted by a customer can be marked unsolicited

A sale of securities that are not owned by a customer is documented as being sold short

All sales of options must be done in a margin account

A day order that’s not executed on a specific day will be carried over to the next day

A buy stop at $17 will be triggered if the stock trades at or below $17

A sell stop at $37 will be triggered if the stock trades at or below $37

A GTC order is adjusted if the underlying stock is the subject of a stock dividend

Due to the high risk in options trading, a customer is required to provide any information requested for the account to be approved

A principal must approve a discretionary order before it is executed

Full trading authority allows cash and securities to be withdrawn from a discretionary account

If a customer specifies the security, the quantity, and whether to buy or sell, the broker can determine when to execute the trade on that day

ERISA requires plans to allow all employees who are at least age 21 and have one year of full-time service to be eligible to contribute to a plan

Distributions from retirement plans derived from the appreciation of securities are taxed as capital gains

An employee must be vested to receive the benefits of the employer’s matching contributions in a 401(k) plan

Contributions to profit-sharing plans are decided by the board of directors